Buying The Dip? MicroStrategy Acquires $414M Worth Of Bitcoins, Taking Total Holdings To $3.57B

MicroStrategy Incorporated MSTR, a provider of enterprise analytics software and services, has been in the spotlight due to its strategy of holding Bitcoin BTC/USD on its balance sheet.

MicroStrategy CEO Michael Saylor is a self-proclaimed Bitcoin bull, who promotes the most valued cryptocurrency with his tweets and statements.

What Happened: With Bitcoin having come off its early November highs, MicroStrategy has added more Bitcoins in the quarter-to-date period in the fourth quarter, according to a new filing with the SEC.

The company said between Oct. 1 and Nov. 29 it purchased about 7,002 Bitcoins valued at $414.4 million in cash at an average price of about $59,187 per Bitcoin.

After a steep rally from late 2020, Bitcoin began a period of consolidation between February and mid-July. The crypto then took off and hit an all-time high of $68,789.63 on Nov. 10.

MicroStrategy's filing also revealed that as of Nov. 29, the firm held about 121,044 Bitcoins, valued at $3.57 billion, based on the purchase price. The average purchase price for the holdings has been $29,534.

At current prices, the holdings could be worth about $7 billion.

Related Link: What Does Bitcoin's Historical December Performance Tell About Its Potential Year-end Price?

Updating on the open market sale agreement of its common shares announced in mid-June, MicroStrategy said in the quarter-to-date period it has issued and sold an aggregate of 571,001 shares at an average price of $732.16 per share for raising net proceeds of about $414.4 million.

This suggests the company may have invested all of the proceeds to buy Bitcoin.

Why It's Important: Despite the current lackluster phase, which has seen Bitcoin experiencing a correction, forecasts call for the crypto to go through the roof, fueled by large-scale mainstream adoption and amid the inflationary environment.

If the crypto heads southward, MicroStrategy could face a setback, given the company has piled up debt to add to its Bitcoin holdings.

MicroStrategy now has the second-largest Bitcoin holdings among public companies, after Tesla Inc TSLA.

As of Monday morning at publication, MicroStrategy shares were up 3.12% to $683.67 and Bitcoin was up 4.90% at $57,022.98.

Related Link: After AMC, Second Largest US Theater Chain To Accept Bitcoin, Dogecoin And More As Payment

Photo by Executium on Unsplash