Throughout the last few years, Michael Saylor (co-founder of MicroStrategy) bought a total of about 130,000 bitcoin at almost $4 billion.
So far, Saylor and Microstrategy have lost about $917 million to bitcoin’s correction since reaching its all-time highs.
Microstrategy and Bitcoin Relation
Under Saylor’s leadership, the company acquired $250 million in bitcoin in August 2020 and added another $175 million in September of the same year.
The exact number of bitcoin Saylor acquired in 2020 is unknown, but it is estimated to be about 129,600 BTC. However, the recent crypto winter has turned the company’s investment sour, causing them losses of billions.
These losses don’t seem to faze MicroStrategy, though. Recently, MicroStrategy entered an agreement with Cowen and Company and BTIG to sell off its aggregated class A common stock valued at a jaw-dropping $500,000,000, as reported by filings from the Securities and Exchange Commission (SEC).
The SEC filings that report MicroStrategy’s plans to sell their common stock also mention that proceedings from the stock offering will be for “general corporate purposes, including the acquisition of more bitcoin.”
It is also worth noting that the purchase of the current dip is necessary for MicroStrategy, as their BTC reserve is down about $2.8 billion. This means the company has an accumulated loss of almost $1 billion.
What Does This Mean to BTC
The price of every commodity and bitcoin depends on demand and supply.
The less of the said commodity in circulation, the greater its scarcity and, therefore, its price. Microstrategy selling off $500 million of its common stock and using part of it to purchase bitcoin fits directly into this narrative.
Buying bitcoin, possibly worth hundreds of millions of dollars, will reduce its supply, making the cryptocurrency slightly more scarce and expensive.
The same happened with Tesla CEO Elon Musk in 2021, when he announced that Tesla had purchased $1.5 billion worth of bitcoin.
The BTC price surged by more than 20% two days after Tesla’s announcement, reaching a high of $44,000.
The same just might happen with Bitcoin and MicroStrategy’s planned purchase.
Following the FTX collapse, Bitcoin, the flagship cryptocurrency, has been following a downward trend. Bitcoin broke through the $18,250 support and even retested the $15,000 zone. Currently, BTC is hovering between $16,681 and $17,051, with a market cap of $321B.
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