TLDR

  • MicroStrategy made its first Bitcoin purchase on August 10, 2020, becoming the first public company to use Bitcoin as its main treasury reserve.
  • As of August 2024, MicroStrategy holds 226,500 BTC worth $13.771 billion, with unrealized profits of about $5.39 billion.
  • MicroStrategy’s stock (MSTR) has increased by around 1,000% since August 2020, outperforming Bitcoin, the S&P 500, and Warren Buffett’s Berkshire Hathaway.
  • Michael Saylor, MicroStrategy’s executive chair, has sold $410.8 million worth of company shares between January and April 2024.
  • Despite some financial losses, MicroStrategy continues to buy Bitcoin and has outperformed 499 out of 500 stocks in the S&P 500.

In August 2020, MicroStrategy, a business intelligence company, made a bold move that would change its future.

The company bought its first Bitcoin, becoming the first public company to use the cryptocurrency as its main treasury reserve. Now, four years later, we look at how this decision has played out.

As of August 10, 2024, MicroStrategy holds 226,500 Bitcoin. This amount is worth about $13.771 billion, based on Bitcoin’s current price of around $60,500. The company bought these Bitcoin at an average cost of about $37,000 each. This means MicroStrategy is now sitting on unrealized profits of about $5.39 billion.

MicroStrategy’s stock, traded under the symbol MSTR, has seen big gains since the company started buying Bitcoin. The stock price has gone up by about 1,000% since August 2020. This increase is more than the rise in Bitcoin’s price and much more than the growth of the S&P 500 index during the same time.

MicroStrategy Incorporated (MSTR)
MicroStrategy Incorporated (MSTR)

MicroStrategy’s stock has even outperformed Berkshire Hathaway, the company run by famous investor Warren Buffett.

While MSTR has grown by 1,000%, Berkshire Hathaway’s Class A stock has only gained about 104.75% in the same period. This difference is notable because Buffett has been openly against Bitcoin, calling it “rat poison squared” in 2018.

Michael Saylor, the executive chair and former CEO of MicroStrategy, has been a key figure in the company’s Bitcoin strategy. Between January and April 2024, Saylor sold 400,000 shares of MSTR stock, earning $410.8 million. This was part of a larger trend of insider stock sales at the company.

Despite these stock sales, MicroStrategy hasn’t sold any of its Bitcoin. Instead, the company has said it plans to keep buying more. Their most recent purchase was on August 1, 2024.

MicroStrategy’s financial results haven’t all been positive though. In the previous quarter, the company reported a loss of $102.6 million. This loss means MicroStrategy isn’t eligible to be included in the S&P 500 index right now.

MicroStrategy has been added to another important stock index. Earlier in 2024, MSTR was included in the MSCI World Index. This happened after the stock’s price grew even more than Bitcoin’s price.

MicroStrategy’s Bitcoin holdings haven’t been purely profitable. The company has spent about $8.35 billion to buy its 226,500 Bitcoin over the past four years. While the current value of $13.74 billion represents a 65% return, it’s similar to what the S&P 500 has done over the same time period.

At the end of June, the company reported having $3.905 billion in debt on its balance sheet. This debt reduces the impact of the gains from Bitcoin.

Despite these challenges, MicroStrategy’s performance has been strong compared to other stocks. According to Saylor, the company has outperformed 499 out of 500 stocks in the S&P 500 since starting its Bitcoin strategy.

As of the most recent reports, MicroStrategy plans to continue its Bitcoin buying strategy. The company made its latest purchase on August 1, 2024, showing its ongoing commitment to this approach.

The post Bitcoin Gamble Pays Off: MicroStrategy’s Four-Year Journey appeared first on Blockonomi.

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