By
Steve Muchoki
April 19th, 2024
Earlier this month, MicroStrategy’s CEO outlined a strategy to receive yields from their Bitcoin holding.
MicroStrategy has added to its Bitcoin holding by buying an additional 1914 BTC between December 9 and December 29 according to an SEC filing. The purchase cost about $92.4 million cash meaning each bitcoin was purchased at an average of $49,229.
The purchase brings the total number of Bitcoins acquired by the 32-year old company to 124,391 bitcoins. This puts the cost of each bitcoin at approximately $30,159 per bitcoin. Interestingly, the company had to sell shares to raise funds for the last purchase. To finance the bitcoin acquisitions, the company sold an aggregate of167, 759 Shares at an average gross price per Share of approximately $565.78.
It won’t be a far stretch based on this to conclude that MicroStrategy CEO, Michael Saylor, is pursuing bitcoin acquisition as a second mandate. Recall that the company first announced its decision to hold bitcoin on its balance sheet in August 2020. Since then, it has continued to purchase bitcoins at every available opportunity to become the largest corporate holder of bitcoin worth about $6 billion at current prices. Tesla, Galaxy Digital Holdings, Square, and Marathon Patent Group round up the list of the top 5 corporate holders of Bitcoin.
Prior to this announcement, the company announced the purchase of 1,434 bitcoin with $82 million between November 29 and December 8. For that purchase, the average cost of bitcoin was $57,477 per bitcoin. Also before that, the company purchased $414 million worth of Bitcoin.
Bitcoin (BTC) Holding to Generate Yield for MicroStrategy
Earlier this month, MicroStrategy’s CEO outlined a strategy to receive yields from their Bitcoin holding. Getting yields from the holdings was to for, part of the firm’s overall business strategy.
According to Saylor, “we have not taken any formal step here yet but we’re enthusiastic about the opportunities to generate yield off of our bitcoin.” He also noted that Saylor would continue to acquire Bitcoin.
Saylor believes that there may be opportunities in the future to mortgage the bitcoin holdings and generate long-term debt. As another possibility, he also noted that the company could lend Bitcoin to a trusted counterparty and generate even more yield in the process.
This is an interesting turn of events given that in 2013, the MicroStrategy CEO believed that Bitcoin did not have a future.