Today a company widely known for its early investment in Bitcoin is sinking another billion dollars into the coin as an asset, even now, while coin values are wildly inflated.
When Microstrategy completed its initial $250 million buy into Bitcoin, coin values were less than half of what they are now. Making such a move was a much more unprecedented action.
“While many companies put surplus capital into bonds and other investments as part of their treasury management strategies, a bet of this size on Bitcoin is all but unheard of,” wrote Jeff John Roberts at Fortune in August of 2020.
Doing what the company did then tied Microstrategy to bitcoin in a very profound way, and it looks like the company is now doubling down.
“The latest buy, MicroStrategy’s single-largest dollar investment in the crypto, is second only to Tesla’s $1.5 billion investment on the list of (known) bitcoin allocations by a U.S. company,” writes Danny Nelson at Coindesk. “MicroStrategy was already and will likely remain the non-crypto firm with the biggest bitcoin bags as CEO Michael Saylor continues to pursue a coin acquisition strategy now codified in the business intelligence company’s mission.”
With the current $1 billion investment, Microstrategy’s total Bitcoin holdings come out to around $4.7 billion.
That makes the initial strategy, which people called a “capital allocation strategy” at the time, something different.
In fact, this is part of the real news behind today’s announcement from Microstrategy – analysts suggest the company is quietly making itself into a publicly traded vehicle for speculation on Bitcoin values moving forward.
For background, the U.S. SEC has slow walked any plans for a Bitcoin exchange traded fund, which would allow investors to buy into a publicly traded market day option based on Bitcoin value.
Since there is no Bitcoin ETF currently approved, buying into Microstrategy could work as the next best thing. It’s an interesting idea, and one that we’ll see develop if Microstrategy continues being all in on BTC.
