logo
Back to News
MicroStrategy Halts Bitcoin Buying

MicroStrategy Halts Bitcoin Buying

Bitcoin News

MicroStrategy Pauses Bitcoin Purchases

MicroStrategy, the business intelligence firm led by Michael Saylor, has temporarily halted its Bitcoin purchases after accumulating approximately $20 billion worth of the cryptocurrency in recent months. This decision was disclosed in an 8-K filing with the SEC. The company confirmed it neither sold any Class A common stock nor acquired additional Bitcoin last week.

MicroStrategy's Bitcoin Holdings Remain Substantial

Despite the pause, MicroStrategy retains a significant Bitcoin position of 471,107 BTC, acquired at an average price of $7,314. At current prices, this represents a cost basis of over $44 billion. The total cost of acquisition for all its holdings stands at approximately $30.4 billion, with an average cost per Bitcoin of $64,511. This represents more than 2.2% of Bitcoin's total supply.

Michael Saylor confirmed the halt in purchases on X (formerly Twitter): "Last week, MicroStrategy did not sell any of its class A common stock under the at-the-market equity offering program and did not buy any Bitcoin."

While the buying spree is on hold, MicroStrategy remains committed to its Bitcoin strategy. The company has utilized equity offerings and debt issuances to fund its acquisitions, with approximately $4.35 billion in shares still available for future sales under its "21/21 plan."

Strong Demand for MicroStrategy's Preferred Stock

MicroStrategy recently raised $563.4 million through a preferred stock offering, further fueling speculation about future Bitcoin purchases. Despite a 1.6% dip on Friday, MSTR shares closed at $334.79, showcasing a remarkable 567% increase over the past year. The company boasts a market capitalization of around $84.1 billion, valuing its Bitcoin holdings at a premium to its net asset value (NAV). This valuation methodology has faced criticism due to the company's reliance on equity and debt to fund its Bitcoin acquisitions.

Despite these criticisms, Mizuho Securities maintains an "outperform" rating for MSTR with a price target of $511, projecting a 30% increase in Bitcoin's price over the next three years.

Bitcoin Price Correction and Market Sentiment

The broader cryptocurrency market experienced recent price declines. At the time of writing, Bitcoin was trading at approximately $X (replace with current price), reflecting a significant drop in the past 24 hours and week. This decline coincided with $2 billion in liquidations, marking a substantial sell-off.

Despite the market downturn, Michael Saylor remains bullish on Bitcoin, reiterating his long-held position that it's a store of value, not simply a speculative asset. Conversely, analysts like Peter Schiff remain critical, suggesting investors are shifting towards traditional safe havens like gold and U.S. Treasuries. Changpeng Zhao offered a contrasting perspective: "You need Bitcoin more than Bitcoin needs you."

Disclaimer: This information is for educational purposes only. Conduct thorough research and consult a financial advisor before making any investment decisions. Codeum is not responsible for any financial losses.

Share this article