Despite market crash, MicroStrategy buys 301 Bitcoins worth $6 million
MicroStrategy has done it again. The Virginia-based business software company has bought an additional 301 Bitcoins worth about $6 million to its balance sheet.
According to a filing with the US Securities and Exchange Commission (SEC) on Tuesday, MicroStrategy purchased 301 Bitcoins (BTC) between August 2 and September 19 for about $6 million.
The filing stated that the software company co-founded by entrepreneur and Bitcoin advocate Michael Saylor bought the world’s largest cryptocurrency at an average price of $19,851 per coin. This is the company’s first purchase since June, when it bought 480 Bitcoins worth about $10 million during that time.
MicroStrategy, best known as the largest corporate buyer of Bitcoin, now has nearly 130,000 Bitcoins, buying them for a total price of $3.98 billion, according to an 8-K filing with the SEC.
Before the latest purchase, the firm revealed on September 15 its plans to sell up to $500 million in Class A shares and use the proceeds to buy more Bitcoins.
In August, Saylor stepped down as CEO of the company and took on a new role as executive chairman to focus his efforts more on Bitcoin.
How does MicroStrategy make money from Bitcoin?
MicroStrategy is known to own more Bitcoin than any other publicly traded company. As of June 14, the Virginia-based business intelligence firm held 129,218 Bitcoins, more than two and a half times as much as Tesla, the second largest Bitcoin holder.
The founder of MicroStrategy believes so deeply in the promise of the flagship cryptocurrency that the firm took out a $205 million loan from Silvergate Bank to buy $190 million worth of Bitcoin in April. But since then, the crypto market, which was already plunging, has gone into freefall.
MicroStrategy purchased its first 21,454 Bitcoins for $250 million in August 2020, citing concerns that the US dollar would lose value due to the Covid-19 pandemic, government stimulus spending and political uncertainty around the world.
Everyone enters the crypto landscape to make money, but not everyone ends up doing so. Many people either give up along the way or lose money because they do not properly understand how to make money with cryptocurrency.
But MicroStrategy understands the principles of making money by investing in Bitcoins. Despite the market plunge, MicroStrategy has continued to invest in the largest cryptocurrency. In January, MicroStrategy CEO Phong Le said that the company’s strategy with Bitcoin has been to buy and hold for long-term purposes (for at least ten years and more). The company has used excess cash flow or found other ways to raise money to continue putting it into Bitcoin.
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