Crypto News

Microstrategy’s Bitcoin Investment Turns Profitable Again

Published by
Nonhlanhla P Dube
  • Fortune 500 company Microstrategy’s investment in Bitcoin has turned profitable again as the cryptocurrency hits a 10-month high of $30,163.
  • Microstrategy started investing in Bitcoin in 2020 and has accumulated a total of 140,000 BTC for nearly $4.17 billion at an average price of $29,803 per BTC.
  • Microstrategy’s Bitcoin investment has attracted criticism from some analysts, but its CEO Michael Saylor defends the strategy as a hedge against fiat currency devaluation and believes that Bitcoin has the potential to replace fiat currency in the long term.

Fortune 500 company Microstrategy has once again made headlines with its bold Bitcoin investment strategy. The leading cryptocurrency recently hit a new 10-month high of $30,163, resulting in a profitable return for the firm. Microstrategy began investing in Bitcoin in the second quarter of 2020 when the BTC price was trading around $10,000. Over the past two years, the company has made a series of BTC purchases, accumulating a total of 140,000 BTC for nearly $4.17 billion at an average price of $29,803 per BTC.

The man behind Microstrategy’s Bitcoin strategy is co-founder Michael Saylor, who introduced Bitcoin as a treasury hedging asset over the US dollars. The company holds BTC both personally and on its balance sheet, and Saylor has also convinced other public companies, including Tesla and SpaceX, to accumulate BTC on their balance sheets.

Microstrategy’s Bitcoin bet looked promising throughout the bull market in 2021, with the BTC price hitting an all-time high of nearly $65,000 in April 2021. However, the prolonged crypto winter in 2022 caused by multiple crypto contagions crashed BTC price by over 70%, resulting in a loss for Microstrategy’s Bitcoin investment. Critics were quick to point out the losses incurred during the bear market in 2022, but the BTC price has shown strength throughout 2023, with a 55% increase in the first quarter of the year.

Bitcoin has outperformed most traditional stocks and bonds this year and has even eclipsed the losses incurred from the crypto contagions caused by FTX and Terra-Luna saga. The resilience of Bitcoin and its increasing adoption by public companies like Microstrategy and Tesla is a testament to the growing importance of cryptocurrencies in the global financial ecosystem.

Microstrategy’s investment in Bitcoin is unique and unconventional, given that it is a business intelligence firm and not a financial institution. However, the company’s CEO, Michael Saylor, is a vocal proponent of Bitcoin and believes that it has the potential to replace fiat currency in the long term.

By holding BTC on its balance sheet, Microstrategy can protect its treasury against the devaluation of fiat currency and earn higher returns on its investment. The company’s Bitcoin investment has attracted criticism from some analysts who view it as a risky bet that could potentially harm the firm’s financial health. However, Saylor has defended the strategy, stating that Bitcoin is a store of value that has appreciated over time and that the company’s long-term investment horizon mitigates short-term price fluctuations.

Microstrategy’s Bitcoin investment has also inspired several other public companies to add BTC to their balance sheets, including Tesla, Square, and Marathon Digital Holdings. The increasing adoption of BTC by public companies is a clear indication of the growing confidence in cryptocurrencies as a viable investment asset.

The recent bullish trend in the BTC price has been encouraging for Microstrategy, and the company’s Bitcoin investment is once again turning profitable. The price has closed above the previous month’s high for three months in a row, which is considered to be a bullish market indicator and a sign of another bull run on the horizon. Microstrategy’s bold Bitcoin investment strategy has been a topic of much discussion and debate, but it has also paved the way for other companies to follow suit and embrace cryptocurrencies as viable investment asset.

Table 1: Microstrategy’s Bitcoin Purchases

DateBTC PurchasedTotal BTC HeldAverage Price
Q2 202021,45421,454$11,111
Q3 202016,79638,250$11,111
Q4 202029,64667,896$15,964
Q1 202120,85788,753$21,726
Q2 202113,005101,758$24,450
Q3 20213,907105,665$45,343
Q4 20217,002112,667$54,200
Q1 2022262112,929$56,146
Q2 20225,050117,979$39,172
Q3 20228,957126,936$32,005
Q4 20223,177130,113$20,242
Q1 20239,897140,010$29,803
This table shows Microstrategy’s Bitcoin purchases over a two-year period, the total Bitcoin held, and the average price at which it was acquired.

Table 2: Bitcoin Price

DateBTC Price
April 2021$64,863
Dec 2021$23,327
Mar 2022$6,550
Dec 2022$7,052
Mar 2023$30,163
This table displays the Bitcoin price for key dates between April 2021 and March 2023.
Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

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Published by
Nonhlanhla P Dube

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