Overview: Felix, PANews
On November 30, the US tech company MicroStrategy announced in an 8-K filing that from November 1 to November 29, the company and its subsidiaries purchased 16,130 bitcoins, worth approximately $593 million, at an average price close to $36,000. This is the largest transaction the company has made since purchasing 19,452 bitcoins in February 2021 at slightly over $1 billion. (Note: Form 8-K, also known as the "current report," is required to be filed by public companies to report the occurrence of any material events that are important to shareholders, such as significant disputes, bankruptcy, or receivership, to the US SEC, rather than waiting until the next periodic report.)
According to the announcement, the Virginia-based company MicroStrategy currently holds a total of 174,530 bitcoins, valued at approximately $6.6 billion. MicroStrategy has spent a total of $5.28 billion on cryptocurrency, with an average purchase price of approximately $30,252 per bitcoin, making it the largest holder of cryptocurrency assets to date.
As early as November, during the company's earnings conference call, MicroStrategy founder Michael Saylor expressed that approving and launching a bitcoin spot ETF would be a "catalytic event" beneficial to his company and other entities holding bitcoin.
Michael Saylor stated during the earnings conference call, "I think as these ETPs (exchange-traded products) provide bitcoin exposure, we will see more and more reports from analysts at traditional Wall Street banks." "More coverage means more education, which sparks more buying interest."
While it is not yet clear what has made MicroStrategy so bullish on bitcoin in November, there has been a significant amount of news related to bitcoin spot ETFs. Additionally, there is approximately five months until the next bitcoin halving, both of which are considered potential positive catalysts for influencing the price of bitcoin.
As MicroStrategy was preparing to submit its 8-K filing on November 28, the US SEC initiated a comment period for the Franklin Templeton bitcoin spot ETF proposal, which was unexpected as it began earlier than anticipated.
MicroStrategy first purchased bitcoin during the "COVID-19" pandemic in August 2020. Shortly thereafter, the bull market followed. Michael Saylor believes that this asset can hedge against inflation and is the best strategy for maximizing returns for shareholders, as the company holds a large amount of cash.
Despite the possibility of MicroStrategy suffering huge losses in 2022 due to its bitcoin purchases, Michael Saylor will step down as CEO and focus on a new bitcoin strategy. However, Michael Saylor's plan seems to be working. Since the company began purchasing bitcoin, MicroStrategy's stock (listed on NASDAQ as MSTR) has risen by 238%. It is currently priced at approximately $493.15 per share, up 17% in the past month.
MicroStrategy's stock has fluctuated since its first purchase of bitcoin; Source: Bloomberg
Michael Saylor believes that buying the company's stock is a way for investors to access cryptocurrency. Michael Saylor has repeatedly mentioned that bitcoin is an asset superior to real estate and gold, and is a "reliable store of value and an attractive investment asset with greater long-term appreciation potential than holding cash." Subsequently, other companies have followed suit. The most notable is the electric car company Tesla. The clean energy company led by the world's richest person, Elon Musk, holds 9,720 BTC, valued at $366 million.
It is worth noting that on November 30, MicroStrategy also reached an agreement with Cowen and Company, Canaccord Genuity, and BTIG to issue up to $750 million in common stock. The company initially announced plans to raise funds through stock sales in August, stating that the proceeds would be used for purchasing bitcoin, operating funds, and debt repurchases.
Related reading: Exclusive Interview with MicroStrategy CEO: Bitcoin's Future Will Rise in the Next Year with the Halving and ETF
References: Decrypt, Blockworks, Bloomberg
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