MicroStrategy Doubles Down on Bitcoin, Vows to Continue Accumulating BTC Despite Market Volatility ⋆ ZyCrypto

Business intelligence firm MicroStrategy has vowed to continue buying Bitcoin, despite the cryptocurrency’s prices fluctuating wildly recently.

This claim was made by Phong Le, CEO of MicroStrategy, while announcing the company’s first quarter financial results on Monday.

“As you all know, our strategy is to acquire and hold Bitcoin, and we plan to continue to accumulate Bitcoin over time using our excess cash and with the net proceeds from capital market transactions,” Le said during the earnings call, noting that Microstrategy’s core business is not affected by short-term Bitcoin price fluctuations.

“We remain committed to our Bitcoin acquisition strategy with a high degree of conviction,” he added.

MicroStrategy has had a long-term focus and a risk-managed approach for its Bitcoin strategy. Since 2020, the firm has continued to buy Bitcoin, with the latest strike at 1,045 Bitcoins earlier last month. Microstrategy currently has 140,000 Bitcoins with a total cost of $4.2 billion or an average of approximately $29,800 per Bitcoin. This makes MicroStrategy the world’s largest publicly traded company owner of Bitcoin.

Le also reassured investors of the firm’s financial health, noting that it had repaid its $205 million Bitcoin-backed loan from Silvergate last year at a 22% discount. In March, MicroStrategy disclosed in a filing with the US Securities and Exchange Commission that it used part of the proceeds from a $339.4 million public sale of its stock to repay the loan.

According to Le, after the repayment, MicroStrategy recovered 34,619 Bitcoins that served as collateral for the loan, which is now unencumbered. As of March 31, 2023, only 11% of MicroStrategy’s total Bitcoin holdings were pledged as collateral for debt.

MicroStrategy’s decision to invest heavily in Bitcoin has been controversial, with some investors expressing concern about the cryptocurrency’s volatility. However, Michael Saylor, now the company’s executive chairman, has remained bullish on Bitcoin, saying it is “100% better than gold”. He has also claimed that Bitcoin is a hedge against inflation and a safe haven during economic uncertainty.

That said, despite MicroStrategy’s Bitcoin holdings remaining in the red for about a year, its bold investment has recently paid off, with its holdings increasing in value as the cryptocurrency’s price rose in recent months. According to ‘Saylor Tracker’ a service that tracks MicroStrategy’s Bitcoin purchases, the firm’s Bitcoin stash value is currently at a loss of $203 million. That said, it remains to be seen if Bitcoin prices can rise for these holdings to turn green or if the cryptocurrency will continue to fall.

At press time, BTC was trading at $28,762, up 2.08% in the past seven days, according to CoinMarketCap data. The largest cryptocurrency by market capitalization traded largely flat on Tuesday, rising just 0.53% over the past 24 hours.