MicroStrategy’s Bitcoin Holdings, Stock Surge in Value After Tesla $1.5B Buy
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It’s only been six months since business intelligence firm MicroStrategy bought $250 million worth of Bitcoin as a reserve asset—but given the vast increase in Bitcoin’s price since then, it seems as though co-founder CEO Michael Saylor was proven correct about the cryptocurrency’s potential, at least in the short term.
Further validation came today when electric car giant Tesla announced that it had purchased $1.5 billion of Bitcoin as a reserve asset. Saylor congratulated and thanked Musk on Twitter for the move and its impact, writing, “The entire world will benefit from this leadership.” Musk and Saylor had previously traded tweets about Bitcoin in December, and the MicroStrategy CEO offered to “share my playbook” on Bitcoin as a business holding.
Congratulations & thank you to @elonmusk & @Tesla on adding #Bitcoin to their balance sheet. The entire world will benefit from this leadership.https://t.co/FVTepBqAI2
— Michael Saylor (@michael_saylor) February 8, 2021
While Tesla’s announcement constitutes a vast buy-in on Bitcoin, MicroStrategy has been steadily buying BTC since that original announcement last August. Last week, Saylor revealed that the company had purchased another $10 million worth of Bitcoin for a grand total of 71,079 BTC, or about $2.5 billion worth.
With today’s Tesla announcement, the price of Bitcoin surged approximately $5,000 to set an all-time high of $44,127 (via CoinGecko), although it has settled a bit and sits at $43,240 as of this writing.
MicroStrategy’s move as the first visible business to amass large quantities of Bitcoin seemingly inspired Tesla’s own announcement today, but the benefits have returned to Saylor’s firm in a major way. Thanks to today’s price increase, the value of MicroStrategy’s BTC holdings now sit at just over $3.07 billion as of this writing.
According to a tweet from Saylor last week, the firm’s BTC were purchased at an average cost of $16,109 per Bitcoin, which means MicroStrategy has spent some $1.145 billion to acquire its holdings. Now at $3.07 billion, that’s a 168% increase in value.
MicroStrategy has seen even larger percentage gains in the value of its stock, which sat at $124 per share on August 10, 2020, the day before the firm announced its first Bitcoin purchase. As of this writing, the price of a MSTR share is $951, rising nearly 18% today alone. All told, the stock price has increased 667% since MicroStrategy announced its first investment into Bitcoin.
Saylor has transformed from a Bitcoin naysayer in 2013 to a true believer in 2020, and now is reaping the benefits of his company’s push into crypto holdings. Last week, he said that he expects an “avalanche of companies” to follow in their path in converting fiat holdings to Bitcoin. If he’s right, Tesla might have just been the second big snowball down the hill.
