Strategy’s Monumental Bitcoin Acquisition: $960 Million Boosts Holdings to 660K BTC

Bitcoin corporate giant Strategy, formerly known as MicroStrategy, has once again made a significant move in the cryptocurrency market. According to an 8-K filing with the U.S. Securities and Exchange Commission (SEC) on Monday, Strategy invested a staggering $960 million to acquire an additional 10,624 Bitcoins between December 1st and 7th. The average purchase price for this latest tranche was approximately $90,615 per Bitcoin.

Expanding the Bitcoin Treasury

This substantial acquisition elevates Strategy’s total Bitcoin holdings to an impressive 660,624 BTC, now valued at approximately $60 billion. The company’s cumulative investment in Bitcoin stands at around $49.4 billion, including fees and related expenses, resulting in an average acquisition cost of $74,696 per Bitcoin.

Currently, Strategy boasts an unrealized profit of approximately $10.6 billion on its Bitcoin portfolio. This formidable holding represents over 3% of Bitcoin’s total circulating supply of 21 million BTC, cementing Strategy’s position as a leading institutional holder.

Strategic Funding for Further Accumulation

The capital for this latest Bitcoin spree was primarily sourced from Strategy’s recent “at-the-market (ATM)” offering. Last week, the company successfully sold 5,127,684 shares of its MSTR Class A common stock, generating approximately $928 million. Notably, over $13.4 billion in MSTR offering capacity remains available for future capital raises. Additionally, Strategy raised nearly $34.9 million by selling 442,536 shares of Stride preferred stock (STRD), with $4.1 billion of that offering capacity still unused.

In a related move last week, Strategy also added 130 Bitcoins to its treasury at an average price of $89,960, totaling approximately $11.7 million. Concurrently, the company announced the establishment of a robust $1.44 billion cash reserve, specifically earmarked for preferred stock dividends and debt interest payments.

Expert Insights on Strategy’s Financial Posture

Matt Hougan, Chief Investment Officer at Bitwise, offered insights into Strategy’s financial resilience. He noted that the newly established cash reserve is ample to cover the company’s financial obligations for over 18 months. Furthermore, with Strategy’s first debt maturity not occurring until February 2027, Hougan emphasized that the company faces no immediate pressure to liquidate its Bitcoin holdings to service debt.

However, not all market observers share the same optimistic near-term outlook. Julio Moreno, Head of Research at CryptoQuant, suggested that Strategy’s significant cash reserve could be a strategic preparation for a potential bear market. Moreno projected that Bitcoin’s price might retrace to the $70,000 – $55,000 range next year.

Michael Saylor’s Unwavering Conviction

Despite varying market forecasts, Strategy’s Executive Chairman, Michael Saylor, remains steadfast in his high conviction for Bitcoin. In an interview earlier this year, Saylor articulated that even in a severe scenario where Bitcoin’s price were to drop by 90% and consolidate for 4 to 5 years, Strategy’s robust capital structure is designed to sustain its operations.

Saylor acknowledged that extreme circumstances could lead to shareholder losses. However, he underscored the company’s financial stability and control, attributing it to the flexible allocation of equity, convertible bonds, and preferred stock within its capital structure.