Strategy, formerly MicroStrategy, acquired 20,356 Bitcoin for $1.99 billion between February 18 and 23. Despite this aggressive move, Bitcoin’s price dropped 0.8% to $94,702 within 24 hours. The firm now holds 499,096 BTC worth $47 billion but markets shrugged off the news, extending Bitcoin’s recent slump.
Meanwhile, Strategy’s stock (MSTR) fell 2.37% to $292.06, deepening monthly losses to 17%. Analysts suggest investor skepticism overshadows the firm’s bullish crypto strategy.
Saylor Doubles Down
Michael Saylor, Strategy’s founder, reiterated his call for the U.S. to acquire 4-6 million Bitcoin, 20% of its supply, to offset national debt. “Owning Manhattan real estate justifies debt; Bitcoin is similar,” he told CNBC in December.
However, critics like author David Gerard dismissed the idea as unrealistic. “Price support for Bitcoin isn’t a fiscal policy,” Gerard argued, highlighting skepticism around Saylor’s vision.
Institutional Backing Grows
BlackRock increased its stake in Strategy from 4.09% to 5%, per SEC filings. Similarly, CalSTRS disclosed an $83 million position in MSTR shares, signalling institutional confidence.
Furthermore, Canaccord Genuity praised Strategy’s “rational cadence” in acquisitions. Investment firm KBW hinted S&P 500 inclusion could follow Strategy’s adoption of updated FASB accounting standards.
Tax Risks and Volatility Loom
Despite gains, Strategy warned of profitability risks in its annual report. The firm acknowledged potential tax liabilities from unrealised Bitcoin gains and noted its software division lacked positive cash flow in 2024.
Currently, Strategy’s Bitcoin reserves sit at a $14 billion profit, per SaylorTracker. Yet, Bitcoin’s price remains $3,000 below its latest purchase average of $97,514, amplifying volatility concerns.
Strategy Nears 500,000 BTC Milestone
Earlier this month, Strategy rebranded from MicroStrategy, adopting a Bitcoin-themed “₿” logo. The shift followed a 12-week buying pause during Q4 earnings, resuming with a $23 billion spree over recent months.
The firm’s average purchase price stands at $66,357 per Bitcoin, totalling $33.1 billion with fees. Its holdings now represent 2.3% of Bitcoin’s capped supply a milestone unmatched by rivals.
Market Reactions
While Bitcoin and MSTR face short-term dips, Strategy’s stock surged 338% over the past year. Pre-market trading recently showed a 1% uptick, hinting at cautious optimism.
The SEC filing revealed Strategy’s $2 billion bond sale funded its latest purchase, with options for $300 million more. Saylor teased the deal on X, stating, “This doesn’t reflect last week’s work,” ahead of the announcement.
High Stakes in Strategy’s Bitcoin Gambit
Strategy’s relentless accumulation underscores Saylor’s conviction in Bitcoin’s long-term value. Yet, market reactions highlight risks tied to macroeconomic trends and regulatory scrutiny. As Wall Street watches, the firm’s balance sheet and Bitcoin’s price hang in delicate balance.
