MicroStrategy's Bitcoin Holdings and Purchase History: A Strategic Overview

MicroStrategy, a software-focused public company led by Micheal Saylor, is the world’s largest corporate holder of Bitcoin. Here’s a look at how much Bitcoin MicroStrategy owns and the significance of its strategy.

When talking about driving crypto’s mainstream adoption, MicroStrategy has emerged as a corporate pioneer, leveraging Bitcoin not just as a digital asset but as a fundamental component of its treasury management strategy. MicroStrategy's strategic approach to Bitcoin investment has become even more relevant with the recent approval of Bitcoin ETFs by the SEC, including applications from major firms like BlackRock and Fidelity. This landmark decision is set to draw substantial institutional investor inflows into Bitcoin, potentially boosting its market cap significantly.

Additionally, the upcoming Bitcoin halving in 2024 is anticipated to further impact Bitcoin's value, reducing the block reward and possibly leading to increased scarcity and price appreciation. These developments underscore MicroStrategy's forward-thinking in leveraging Bitcoin within its treasury management strategy, highlighting the growing institutional acceptance of Bitcoin as a legitimate asset class.

In this article, we explore the intricate journey of MicroStrategy's Bitcoin investments, providing insights into its purchase history and the strategic foresight behind these acquisitions.

MicroStrategy (MSTR) is an enterprise business intelligence (BI) software vendor known for its comprehensive platform designed to assist enterprises in making data-driven decisions and optimizing business processes. The company offers a suite of tools and capabilities, including interactive dashboards, scorecards, ad hoc queries, automated report distribution, and highly formatted reports. With a focus on enhancing efficiency and productivity, MicroStrategy integrates AI and BI analytics, offering solutions like HyperIntelligence for real-time, embedded analytics. Founded in 1989 by Michael J. Saylor, MicroStrategy has established itself as a key player in the business intelligence and analytics sector, serving a diverse range of industries by enabling them to leverage data for strategic decision-making.

Michael Saylor, the Executive Chairman of MicroStrategy, is a prominent advocate for Bitcoin, viewing it as a superior asset for long-term investment over traditional currencies due to its digital and decentralized nature. Saylor's bullish outlook on Bitcoin is reflected in his aggressive investment strategy for MicroStrategy, which has amassed one of the world's largest corporate holdings of Bitcoin.

Tweet by Michael Saylor on his company’s recent Bitcoin purchase | Source: X

He has made several price predictions in the past, suggesting that Bitcoin's value could reach astronomical levels as it becomes more widely adopted and recognized as a digital store of value. However, specific price targets have varied over time. According to his latest forecasts, Saylor expects Bitcoin’s price to touch $44,000 by the end of 2024 and surge to $100,000 by 2025.

MicroStrategy has recently introduced MicroStrategy AI, a significant addition to its AI/BI platform designed to empower organizations with the ability to integrate transformative AI experiences into their applications and products, all grounded on trusted data. This innovative offering aims to transform how organizations analyze data and interact with insights, making data analysis simpler, faster, and more accessible across the entire enterprise. It marks a significant step for MicroStrategy in establishing itself as a leader in AI and BI in the cloud, leveraging large language models (LLMs) and generative AI to enhance employee productivity and organizational efficiency.

MicroStrategy (MSTR) made headlines in August 2020 when it announced its initial purchase of Bitcoin, citing the digital currency as a reliable store of value and an attractive investment asset with more long-term appreciation potential than holding cash. This move was not just a one-off purchase but marked the beginning of a systematic investment strategy in Bitcoin.

MicroStrategy's journey into Bitcoin began in August 2020 when it announced the purchase of 21,454 BTC for approximately $250 million. This initial investment marked a significant pivot in the company's treasury management strategy, citing Bitcoin's potential as a hedge against inflation and a promising store of value. Since then, MicroStrategy has continued to increase its Bitcoin holdings through various purchases, often timed with market dips, showcasing a strong conviction in Bitcoin's long-term value.

August 2020: MicroStrategy's initial investment in Bitcoin, purchasing 21,454 BTC at an average price of around $11,654 for approximately $250 million.
September 2020: Additional purchase of 16,796 BTC at an average price of around $10,422, investing another $175 million.
December 2020: Accelerated its investment, buying an additional 29,646 BTC (average price: approximately $22,000) for about $650 million through a convertible senior note offering aimed at raising funds to buy more Bitcoin.
2021: In 2021 alone, MicroStrategy executed a notable purchase on June 21, acquiring approximately 13,005 bitcoins for around $489 million, equating to an average price of approximately $37,617 per bitcoin.
2022: Notable transactions include the purchase of 2,395 bitcoins from November 1 to December 21, 2022, at an average price of $17,871 per bitcoin. Interestingly, MicroStrategy sold 704 BTC in December 2022 when Bitcoin was trading at around $17,800.
2023: Between March 27 and April 5, 2023, MicroStrategy acquired 6,455 bitcoins at an average price of $28,016 per bitcoin. The company's aggressive purchase strategy continued through April to June 2023, with 12,333 bitcoins acquired at an average price of $28,136 per bitcoin. By July 2023, MicroStrategy had added another 467 bitcoins at $30,835 each on average.
February 2024: Purchased 3,000 BTC between 15 and 25 February 2024 at an average price of $51,813 each.
March 2024: Purchased 12,000 BTC for $821 million for an average price of $68,400 each.

At the time of writing, in March 2024, MicroStrategy's Bitcoin holdings stood at 205,000 BTC, acquired at an aggregate purchase price of over $6.9 billion, and enjoyed an unrealized profit of over $8 billion. This makes the company the world's largest publicly traded Bitcoin holder. This aggressive accumulation strategy has positioned MicroStrategy as a forerunner in the corporate adoption of Bitcoin.

Additionally, MicroStrategy is also planning a private offering of $600 million in convertible senior notes due 2030, targeting qualified institutional buyers under Rule 144A of the Securities Act. The offering includes an option for initial purchasers to acquire an additional $90 million aggregate principal amount of notes 'within a 13-day period', and the notes offer flexibility for conversion into cash or MicroStrategy’s class A common stock.

Following the announcement, MicroStrategy’s stock, MSTR, surged nearly 24%, reaching $1,334 per share, its highest value in nearly two decades. Ever since MicroStrategy adopted the practice of integrating Bitcoin into its corporate treasury in August 2020, it has seen an impressive 809% surge in its stock.

The net worth of MicroStrategy, while influenced by its core business operations, has increasingly become tied to the fluctuating value of its Bitcoin holdings. As Bitcoin's price has experienced significant volatility, so has MicroStrategy's market valuation. We will not provide real-time net worth due to the dynamic nature of Bitcoin's price but will outline the methodology for calculating it.

To provide perspective, we will compare the return on investment(ROI) of Bitcoin to that of a traditional investment benchmark, the S&P 500, over the same period. Assuming MicroStrategy began its Bitcoin investment in August 2020, Bitcoin has experienced a rollercoaster of price movements, with significant peaks and troughs. Despite this volatility, Bitcoin's overall growth trajectory has outpaced many traditional investments, including the S&P 500, in the same timeframe.

Calculating MicroStrategy’s Net Worth

Calculating MicroStrategy's net worth involves considering the MSTR stock price and Bitcoin holdings.

Stock Price: Multiply the current price the MSTR stock is trading at ($1484.23) by the total number of outstanding shares (14,221,000).
Bitcoin Holdings: Multiply the number of BTC held (205,000) by the current market price of Bitcoin ($72,000).

Adding these two values gives you an estimate of MicroStrategy's net worth, around $35.95 billion. However, it's important to remember that the market price of Bitcoin fluctuates significantly, so the net worth will change accordingly.

BTC vs. S&P 500 ROI comparison: 2019-2024 | Source: TradingView

A pivotal aspect of MicroStrategy's investment thesis is the comparison of Bitcoin's ROI against traditional investment vehicles like the S&P 500. Historically, Bitcoin has exhibited higher volatility and significantly higher returns over certain periods.

ROI vs. USD	2020	2021	2022	2023
Bitcoin (BTC)	301%	90%	-81.02%	150%+
S&P 500 (SPX)	18.40%	28.71%	-18.11%	26.3%

Bitcoin's ROI (in USD): Since MicroStrategy's initial investment in 2020, Bitcoin has seen periods of explosive growth, followed by corrections. Despite this, its trajectory has been upward, outpacing many traditional assets, including the S&P 500. Bitcoin crashed more than 80% in 2022 but witnessed a more aggressive surge than the S&P 500 in the other 3 years respectively.
S&P 500 ROI (in USD): The S&P 500, a benchmark for U.S. stock market performance, has provided steady, albeit lower, returns over the same period. It represents a diversified risk but lacks the same growth potential as Bitcoin in a high-risk, high-reward scenario. The benchmark dipped around 18% in 2022 but has seen a sound surge in 2020, 2022, and 2023.

MicroStrategy's continued acquisition of Bitcoin, spearheaded by its CEO Michael Saylor, is driven by a belief in Bitcoin as the premier long-term store of value, superior even to gold. The company views Bitcoin's capped supply of 21 million coins as a key advantage, ensuring its scarcity and potential for value appreciation as demand increases. This scarcity, coupled with Bitcoin's global adoption potential, positions it as an effective hedge against inflation, unlike fiat currencies which can be printed at will by governments. The digital nature of Bitcoin allows for efficient energy transfer across space and time, further underlining its utility and potential for widespread acceptance.

Michael Saylor articulates Bitcoin as a "cyber-economy" based on truth and thermodynamics, suggesting that, unlike commodities whose increased value leads to increased production, Bitcoin's capped supply channels human ingenuity towards value creation rather than inflationary expansion. This perspective is part of a broader investment philosophy that sees Bitcoin as the most efficient method for storing and transporting value across time and space, potentially ushering in widespread adoption that benefits humanity. MicroStrategy's aggressive investment in Bitcoin reflects a speculative bet on this adoption, aligning with historical precedents for the adoption of new technologies.

MicroStrategy's foray into Bitcoin represents a watershed moment for corporate investment strategies in digital assets. By leveraging Bitcoin's potential as a store of value and an investment asset, MicroStrategy not only aims to enhance its treasury management but also positions itself at the forefront of a financial paradigm shift. As the crypto market continues to grow and experience higher mainstream adoption, MicroStrategy's Bitcoin holdings and purchase history will undoubtedly serve as a critical case study for corporations worldwide.