Microstrategy and BTC’s Relationship
3 min read
The special relationship to BTC (BTC) from Microstrategy is known throughout the cryptocurrency market: all free profits are used by the company to purchase digital gold.
In addition, not only the remaining profits but also the funds earmarked for this purpose are used for this purpose. Microstrategy regularly attracts funds that are used to purchase BTC.
This was the case in early June 2021. Microstrategy announced convertible senior bonds worth $400 million, with a maturity date of 2028. Here we have to take into account that at the moment of the issue of bonds, the company already owned over 92,000 BTC.
It was enough to attract an investment, even more than was necessary: $500. At the same time, demand for Microstrategy bonds was $1.6 billion, which is four times higher than supply. According to experts, this demand is due to the novelty of the cryptocurrency market.
Microstrategy, in the eyes of the participants of the cryptocurrency market, has become a kind of BTC Dispenser. Taking the 92,000 BTC at an average rate of $40,000, the company owns more than $3.6 billion in digital gold. It is the largest public investor in the cryptocurrency industry.
Now, Microstrategy stock has already started to correlate with the cost of BTC. Investors can invest in Microstrategy, thus investing in BTC, but through a traditional representative. Of course, there are different funds and ETF, but it’s a matter of taste.
And most recently, Microstrategy made a statement: there will be an additional issue of shares of the company, to attract investments and reinvest them in BTC. The estimated amount of investment to be attracted is $1 billion. In June 2021, the company plans to spend about $1.5 billion to purchase BTC.
After this announcement, the company’s shares grew by 5% and, most interesting, against the market. Shares of companies such as Coinbase, Tesla, and Square fell while Microstrategy grew.
Michael Saylor (CEO of Microstrategy) commented on the company’s strategy:
“Some will say that buying BTC is a fatal strategy. We will not talk about the profits we have derived from investing in the main cryptocurrency. Our main business (software development and production) last quarter showed the best results in the history of the company. Investment in BTC has only strengthened the Microstrategy brand”.
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