Microstrategy, a publicly-traded mobile software company, in a filing with the Securities and Exchange Commission (SEC) has revealed they have purchased 7002 Bitcoin’s in the fiscal fourth quarter. The company spent $144.4m.
The biggest corporate Bitcoin holders purchased each coin for approximately $83,817 AUD which is over $10,000 AUD higher than the current Bitcoin price. With the purchase, the company’s total Bitcoin holding moves to 121,044 BTC purchased at an average price of $41,918 AUD per coin.
Microstrategy sold class A common stock it previously disclosed in June to finance the purchase of Bitcoin. The company revealed it offered and sold 571,001 shares for $586.54 million AUD within the fourth quarter. It sold each share for an average of $1036.59 AUD.
The company remains one of the most bullish on the crypto market. It has invested billions into Bitcoin in recent months and always seems up to buy more.
The latest investment by the company was looking to take advantage of the recent dip in market prices. After trading at some of its all-time high levels of over $85,000 AUD, the coin is currently trading at around $72,000. However, several market analysts believe that the coin will have an upturn before the end of the year.
While Microstrategy enjoys the sustained value increase that Bitcoin has experienced recently, it also suffers from the volatile nature of Bitcoin.
Already, some companies like Pepsi have concluded that there’s no way they can put cash into Bitcoin. For Microstrategy though, investing in Bitcoin is a winning strategy, despite the losses it has suffered in recent months. The company recorded losses of almost $36.1 million in the third fiscal quarter, almost double its losses a year ago. It had already lost $409m before tax in the first month of this financial year.
Microstrategy CEO Michael Saylor is also big on Bitcoin investing. He announced in October that he has 17,732 BTC in his wallet, purchased for an average of $13,990 AUD each. At current trading values, Saylor’s Bitcoin is worth around $1.28 billion AUD.
The company follows a strict holding trading strategy. In an interview in August, the CEO explained that the company purchases coins itself and provides its own custody and does not lend. He explains that the strategy has become part of the company’s business model as it pushes the Bitcoin agenda.
Among the publicly traded companies, only Tesla can rival Microstrategy’s Bitcoin holdings, with its 42,000 BTC. However, there is the feeling that more companies will be investing in Bitcoin in the future.
Most institutional investors have avoided Bitcoin due to its volatility and lack of regulations. Unlike Microstrategy, they are not willing to face concerns that come with buying Bitcoin by themselves. However, they are likely to take up safer exposure to the asset through regulated investments like Exchange Traded Funds (ETFs).