In a remarkable display of confidence in cryptocurrency, MicroStrategy has made headlines with its latest massive Bitcoin acquisition – MicroStrategy’s $2B Bitcoin Buy. The company has added approximately 27,200 BTC to its holdings, investing $2.03 billion between October 31 and November 10, 2024.
Breaking Down the Mega Purchase
The timing of this acquisition coincides with Bitcoin’s historic rally to a new all-time high exceeding $82,000. However, what’s particularly interesting is that the Michael Saylor-led company secured each Bitcoin at $74,463, demonstrating strategic timing in their purchase.
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A Bitcoin Giant Emerges
Following MicroStrategy’s $2B Bitcoin Buy, MicroStrategy’s Bitcoin portfolio has reached an impressive 279,420 BTC. To put this in perspective, this represents about 1.3% of Bitcoin’s total circulating supply. The company has now invested a total of $11.9 billion in Bitcoin, maintaining an average purchase price of $42,692 per BTC, including all fees and expenses.
Impressive Returns and Market Impact
At current market prices, MicroStrategy’s Bitcoin holdings have soared to more than $20 billion in value. This translates to a remarkable unrealized gain exceeding $10 billion. Furthermore, the company’s Bitcoin yield shows strong performance:
- 7.3% from October 1 to November 10
- 26.4% year-to-date
Stock Market Response
The market has responded positively to this strategic move. According to Google Finance data, MicroStrategy’s shares jumped approximately 10% in pre-market trading, reaching $270.
Funding the Future
Behind this massive purchase lies a well-planned financing strategy. MicroStrategy has utilized two key agreements:
August 2024 Agreement
The company established a $2 billion sales agreement with several financial institutions, including TD Securities, The Benchmark Company, and BTIG.
October 2024 Agreement
A subsequent $21 billion sales agreement was formed with additional partners, including Barclays Capital, Cantor Fitzgerald, and Mizuho Securities.
MicroStrategy’s $2B Bitcoin Buy: Impact on Shareholders
Despite potential share dilution concerns, each MicroStrategy share still represents 0.00124464 BTC, with approximately 197.3 million shares in circulation. Following the announcement, the Bitcoin price experienced a slight 0.5% dip, moving from $82,300 to $81,800.
