MicroStrategy Inc. has once again made headlines with its bold approach to acquiring Bitcoin. In its latest move, the company has purchased 11,931 BTC for approximately $786 million between April 27 and June 19. This significant acquisition is the third-largest purchase MicroStrategy has made in terms of USD value, but it ranks as the seventh-largest in terms of the number of BTC tokens acquired.
This latest acquisition comes at a time when investors and analysts are closely monitoring Bitcoin’s price trajectory. MicroStrategy’s previous large Bitcoin purchases have had varying effects on BTC prices. For example, when the company acquired 21,454 BTC on August 11, 2020, there was a slight dip in Bitcoin’s price followed by a longer-term uptrend. Similarly, the purchase of 29,646 BTC on December 21, 2020, led to a substantial price surge within a week, reflecting the positive market sentiment fueled by significant institutional buys.
More recently, MicroStrategy’s acquisition of 10,500 BTC on March 10, 2024, caused a price increase from $72,025 to $74,150 in a week. However, this rally was short-lived as traders started taking profits. The historical pattern suggests that while MicroStrategy’s purchases can result in short-term volatility, they generally contribute to long-term bullish trends.
According to a filing with the US Securities and Exchange Commission, MicroStrategy acquired the 11,931 BTC at an average price of around $65,900 per Bitcoin. This purchase follows a significant acquisition of 12,000 BTC for $821 million in March 2024. In total, MicroStrategy has spent over $2.4 billion on Bitcoin in 2024, bringing its total holdings to 226,331 BTC, which is valued at approximately $14.9 billion. Despite the total expenditure of $8.3 billion, the company has achieved an impressive 80% paper gain on its investments.
If history repeats itself, Bitcoin prices are likely to experience a bull run, potentially reaching a new all-time high. It is worth noting that Michael Saylor, the chairman and co-founder of MicroStrategy, has been a vocal advocate for Bitcoin as a strategic asset. Saylor started accumulating Bitcoin in 2020, seeing it as an inflation hedge and a superior alternative to holding cash. With Bitcoin’s value increasing by around 600% since then, Saylor’s strategy has proven to be valid. His conviction remains strong, as evidenced by the continued acquisitions funded through various financial mechanisms, including convertible notes.
MicroStrategy’s strategy of using debt to acquire Bitcoin indicates a long-term bullish outlook on the cryptocurrency. The significant paper gains and market indicators suggest that the wider market shares MicroStrategy’s optimistic view on BTC prices. The consistent increase in Bitcoin’s open interest, which correlates with a rising price, reflects growing investor confidence and higher capital inflows into Bitcoin futures. This trend is typically a precursor to price increases. The positive OI-weighted funding rate, despite short-term fluctuations, signifies that traders are placing more bullish bets and expecting price rises. Overall, these metrics indicate a bullish sentiment among traders and investors, suggesting that Bitcoin may continue to grow and gain upward momentum in the near future.
