Bitcoin Rises Above $30,000: MicroStrategy’s Investment Pays Off After 10 Months

04/11/2023 09:47 • Metaverse Matters • 139 views

On April 11th, it was reported that as the price of Bitcoin broke through the $30000 threshold, MicroStrategy’s previous investment of approximately $4.17 billion in 140000 Bitcoins (with an average purchase cost of $29803) has returned to a floating profit state after 10 months.

MicroStrategy’s Bitcoin holdings returned to floating profit status after 10 months

In April 2021, Bitcoin hit an all-time high of over $64,000, but just a few months ago, it was trading at around $30,000. However, the price of Bitcoin has been volatile since its inception, so rapid changes in its value are nothing new. But what is noteworthy is how one company, MicroStrategy, has been able to profit from its significant investment in Bitcoin.

MicroStrategy’s Investment in Bitcoin

In August 2020, MicroStrategy made headlines when it announced that it had invested $250 million in Bitcoin as part of its capital allocation strategy. The company, which provides business intelligence, mobile software, and cloud-based services, was one of the first publicly-traded firms to invest in Bitcoin as a store of value.
But MicroStrategy didn’t stop at $250 million. Over the next few months, the company continued to purchase more Bitcoin, eventually accumulating 140,000 Bitcoins at an average cost of $29,803. The total investment amounted to approximately $4.17 billion.

Bitcoin’s Rise Above $30,000

Ten months after MicroStrategy started buying Bitcoin, the price of Bitcoin surpassed the $30,000 threshold in January 2021. According to reports, MicroStrategy’s investment was now worth over $5 billion, indicating a significant return on investment (ROI). However, the company did not sell any of its Bitcoins at that time.
In February 2021, MicroStrategy announced that it had purchased an additional 19,452 Bitcoins for approximately $1.026 billion. These purchases brought the company’s total Bitcoin holdings to 90,531, worth over $4.5 billion at the time.
On April 11th, 2021, Bitcoin again rose above the $30,000 mark, and MicroStrategy’s investment in Bitcoin broke even, meaning that the profit offset the initial cost of investment. The floating profit of the investment is currently valued at around $1.3 billion.

MicroStrategy’s Bitcoin Strategy

MicroStrategy’s CEO, Michael Saylor, is a vocal advocate of Bitcoin, calling it the world’s most dominant digital monetary network. Saylor views Bitcoin as a hedge against inflation and the deterioration of fiat currencies, such as the US dollar.
Saylor announced that his company’s Bitcoin investment was based on a bold and ambitious strategy to shift MicroStrategy’s primary reserve asset from cash to Bitcoin. He argued that Bitcoin is superior to cash as it has a predictable monetary supply, is immune to dilution, and is verifiable. It can also be programmed to perform complex financial functions.

Conclusion

MicroStrategy’s investment in Bitcoin is certainly one of the most significant investments that a public company has made in the cryptocurrency. Although the cryptocurrency market is volatile and risky, the return on MicroStrategy’s Bitcoin investment is undoubtedly impressive. The success of the company’s investment in Bitcoin could encourage other companies to follow suit and invest in Bitcoin as a hedge against inflation and a store of value.

FAQs

1. What is MicroStrategy’s total investment in Bitcoin?
MicroStrategy has invested approximately $4.17 billion in Bitcoin, acquiring 140,000 Bitcoins at an average cost of $29,803.
2. Why did MicroStrategy invest in Bitcoin?
MicroStrategy’s CEO, Michael Saylor, views Bitcoin as the world’s most dominant digital monetary network and a hedge against inflation and fiat currencies’ deterioration, such as the US dollar.
3. How much profit has MicroStrategy made from its Bitcoin investment?
As of April 2021, MicroStrategy’s investment in Bitcoin has returned to a floating profit state, valued at around $1.3 billion.

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