Research Summary
The report analyzes MicroStrategy’s Bitcoin holdings since 2020, highlighting a 612.2% increase in total holdings. MicroStrategy’s Bitcoin averages 74.3% of its total balance sheet assets, with an initial acquisition of 21,454 BTC in August 2020. The company has focused on growing its business intelligence software and acquiring Bitcoin for the future. As of August 17, 2023, MicroStrategy holds approximately 152,800 BTC, making it the leading institutional investor of Bitcoin.
Key Takeaways
MicroStrategy’s Bitcoin Acquisition Journey
- Initial Investment: MicroStrategy’s initial acquisition in 2020 marked the first time a publicly traded company bought and held Bitcoin, quickly becoming 71.9% of the total assets on their balance sheet.
- Substantial Growth: As of August 2023, MicroStrategy holds 152,800 BTC, a 612.2% increase since their initial acquisition, equivalent to 0.786% of the total current Bitcoin supply.
- Strategic Focus: The company has maintained a dual strategy of growing their business intelligence software and acquiring Bitcoin, reducing cash and cash equivalents from 49.8% to 4.07%.
Yearly and Quarterly Analysis of Bitcoin Purchases
- Record Year in 2021: MicroStrategy executed 16 purchases in 2021, four times the number of purchases made in other years, despite acquiring less Bitcoin than in 2020.
- Reduced Acquisitions: From Q4 2021 to Q3 2022, the company reduced its Bitcoin acquisition significantly, with purchases falling an average of 62.6% QoQ.
- Ramp Up in 2023: With Bitcoin prices falling, MicroStrategy started ramping up their purchases again between Q4 2022 and Q2 2023, increasing their total acquisition by 435.12%.
Leadership and Strategy Consistency
- Only Sale of Bitcoin: MicroStrategy made their only sale of Bitcoin in December 2022, selling 704 BTC for tax advantages, and quickly bought more to increase their overall holding.
- Steady Conviction: Despite a change in leadership, the company has remained steady in its Bitcoin conviction, with no signs of redirecting its course in the near future.
- Methodology and Analysis: The report’s methodology includes examining Bitcoin purchases quarter-on-quarter and year-on-year, using financial statements, tweets, and news reports.
Actionable Insights
- Strategic Investment: MicroStrategy’s consistent investment in Bitcoin reflects a strategic focus on digital assets, providing insights into how publicly traded companies can diversify their portfolios.
- Adaptation to Market Conditions: The company’s ability to adapt its acquisition strategy according to market conditions, such as reducing or increasing purchases, offers a model for dynamic investment planning.
- Leadership and Vision Alignment: MicroStrategy’s unwavering commitment to Bitcoin, even after a leadership change, emphasizes the importance of aligning investment strategies with long-term vision and goals.
