TLDR
- MicroStrategy holds almost half a million BTC.
- That’s 2% of the total supply.
- They’re using “convertible debt” to buy it, concerning some investors and exciting others.
If you spend even a little time in the crypto world, you’ve probably heard the name MicroStrategy. This business intelligence firm has become synonymous with corporate Bitcoin holdings, and as of early January, they now own a jaw-dropping 447,470 BTC (yes, you read that right). That’s roughly 2.1% of Bitcoin’s total 21 million supply.
Impressive, sure. But if you’re new to crypto — and especially if you’re trying to make sense of what businesses like MicroStrategy are doing — this might leave you with one huge question:
What does MicroStrategy actually do aside from buying buckets of Bitcoin? That’s a good question. Let’s break it down.
The Basics of MicroStrategy
At its core, MicroStrategy is a business intelligence (BI) and analytics tech company that’s all about helping businesses analyze their data.
Founded in 1989, the company provides software tools that enable organizations to crunch data, generate reports, and make better decisions based on their insights.
Think of it like this: If you run a business and want to know everything from your top-performing products to your best marketing channels, MicroStrategy’s tools can help you spot trends, identify opportunities, and strategize.
The company’s services aim to guide better business decisions by putting data at the center of it all.
As you’ve probably figured out already, their cloud-based service is now heavily relying on AI. What may come as a bit of a shock is the stick price. It runs around $60,000 a year.
MicroStrategy’s Bitcoin Buying Spree
At this point, it’s fair to say MicroStrategy isn’t just any business intelligence firm. It’s the de facto corporate Bitcoin bag holder. Since 2020, under the leadership of their co-founder and executive chairman, Michael Saylor, the company has made massive waves by adopting Bitcoin as a primary treasury reserve asset.
What does this mean? Instead of holding onto more traditional assets like cash or bonds, MicroStrategy has chosen to store a substantial portion of its corporate wealth in Bitcoin.
And if you’re wondering why, Saylor is unapologetically vocal about his reasoning. He sees Bitcoin as a “dependable store of value” compared to fiat currencies, which he argues are subject to inflation and depreciation.
The Latest Bitcoin Acquisition
MicroStrategy continued its BTC-buying frenzy in late December 2024. According to an 8-K filing with the Securities and Exchange Commission (SEC), they purchased an additional 1,070 BTC for around $101 million, paying an average price of $94,004 per Bitcoin.
For context, MicroStrategy amassed its massive 447,470 BTC stash for $27.97 billion, including fees and expenses. The average purchase price? Roughly $62,503 per Bitcoin.
The company has been funding these acquisitions in part through stock sales. For instance, during the same buying spree, they sold 319,586 of their own shares, raising another $101 million. And that’s just scratching the surface of their broader strategy, which involves aggressive equity offerings and fixed-income securities to fund future Bitcoin purchases.
Why Does MicroStrategy Hold Bitcoin?
MicroStrategy’s whole “strategy” with Bitcoin (pun very much intended) boils down to these key points:
- Inflation Hedge: Saylor — and by extension, MicroStrategy — bets big that Bitcoin will outperform traditional assets like cash over time. As governments print more money and inflation eats into fiat’s value, Bitcoin’s fixed supply makes it a deflationary asset, at least in theory.
- Store of Value: Bitcoin is often touted as “digital gold,” and MicroStrategy treats it like that. They intend to hold onto their Bitcoin over the long term.
- Corporate Growth: Owning substantial BTC has given MicroStrategy a certain buzz in crypto and financial circles. This “Bitcoin-first” approach has arguably strengthened its brand visibility, particularly among crypto enthusiasts and forward-thinking investors.
The Risks of MicroStrategy’s Strategy
Of course, piling into Bitcoin isn’t all blue skies and sunshine.
Bitcoin’s volatility means MicroStrategy’s profitability is tightly linked to the cryptocurrency’s price movement. Should BTC enter a prolonged bear market (as it has in the past), the company’s heavy Bitcoin holdings could backfire financially.
Critics also argue that MicroStrategy has become a “proxy Bitcoin ETF,” which could distract from its original business of providing business intelligence solutions. However, it’s not necessarily a bad thing, either. When people want exposure to the crypto market without having to touch a token or exchange, they can log on to Robinhood and buy stock.
And since acquisitions like these often involve share sales or debt issuance, investors remain divided about the ongoing risks tied to leveraged Bitcoin purchases.
Simply put, it’s a bold strategy that could pay off handsomely or pose significant challenges if the market turns against them.
What Does This Mean for Crypto Beginners?
If you’re a newcomer to crypto, MicroStrategy’s actions can teach you a thing or two about how businesses and investors are adopting Bitcoin at scale. Here are some takeaways:
- Volatility Is Real: Even companies as big as MicroStrategy take on significant risks by investing in something as volatile as Bitcoin. The same applies on an individual level — only invest what you’re prepared to lose.
- Long-Term Thinking: MicroStrategy’s approach is based on holding Bitcoin for the long haul, betting that BTC’s value will continue to grow over time. If you’re considering investing, consider whether a similar mindset appeals to you.
- Crypto Is Going Mainstream: When large, traditional companies like MicroStrategy adopt Bitcoin as part of their strategy, it signals a larger trend of institutional interest in crypto. While it doesn’t guarantee success, it does reflect growing legitimacy within the financial world.
For crypto beginners, MicroStrategy represents a bold case study, blending traditional business strategies with frontier technology. And if you’re considering venturing into Bitcoin yourself, it’s worth learning from their successes — and risks.
