Strategy Pulls The Trigger On A $2.01B Bitcoin Purchase

• Strategy bought 24,869 Bitcoin for $2.01B over the week, raising its holdings to 843,738 BTC and securing 4.21% of the coin’s circulating supply.

“₿ig Dot Energy,” Michael Saylor, Executive Chair of Strategy (formerly MicroStrategy), declared on his social media account last Sunday. It came with a chart showing all the Bitcoin (BTC) purchases of their company so far.

Again, the cryptic post served as a sign of an impending major announcement from the business around its BTC playbook.

Update on Strategy’s Bitcoin Reserves

According to a Form 8-K filing at the US Securities and Exchange Commission (SEC), Strategy greenlighted the acquisition of 24,869 BTC from May 11 to 17. The transaction cost approximately $2.01 billion at an average price of $80,985 per BTC.

The company funded its latest buy with proceeds from its Stretch (STRC) Preferred Stock and Common (MSTR) Stock offerings during the same period. The sale yielded $1.949 billion from STRC and $83.7 million from MSTR shares.

The move raises Strategy’s portfolio to 843,738 BTC, for which the business has secured an aggregate sum of $63.87 at a dollar cost average of $75,700 per BTC. Its haul now accounts for 4.21% of Bitcoin’s circulating supply of 20.03 million.

To date, Strategy has a Multiple to Net Asset Value (mNAV) of 1.24. The figures indicate that investors are paying a 24% premium to own the company’s shares relative to the spot value of its Bitcoin holdings.

As a safeguard, the Bitcoin development company and business intelligence solutions provider also maintains a cash reserve of $2.25 billion. It enables the institution to cover up to 15.8 months of dividend payments to investors based on its cash reserves alone. Meanwhile, its BTC holdings enable it to extend its dividend coverage by up to 37.7 years.

Pundits React

Strategy received both praise and negative feedback for its Bitcoin commitment. As usual, gold veteran Peter Schiff, Chair of SchiffGold, led the opposition.

Critics again lambasted Saylor’s update about Strategy’s latest Bitcoin acquisition. Their key argument centered on the company’s purchase of over $80K per BTC, when the asset was already trading around $76K on Monday. At Bitcoin’s fluctuation between $78K and $76K in the last 24 hours, the premier crypto asset is already trading 3.14%-5.54% below the business’s average purchase cost across the week.

Schiff argued that Bitcoin would be much lower now without Strategy’s meddling, suggesting its weak fundamentals. Furthermore, he claimed that the company’s “paper gain” or unrealized profits on its Bitcoin position, which it accumulated for more than five years, is just 2.5%. He said that it’s hard to find a worse-performing investment than what Saylor and their company have gotten themselves into.

However, it’s worth noting that Strategy often has higher average acquisition prices than Bitcoin’s actual prices because it places orders through OTC (Over-the-Counter) trading desks. One that Schiff and his flock consistently ignore to push their negative narratives against the Bitcoin development company.

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