MicroStrategy buys more bitcoin after crypto investment grows by $1bn

Software firm is largest corporate crypto investor ahead of Tesla

MicroStrategy announced the acquisition of more bitcoins on 1 February, 2022 (MicroStrategy)

MicroStrategy has acquired a further $25 million worth of bitcoin, taking the software firm’s total holdings close to $5 billion.

The latest investment comes during a bumpy time for the cryptocurrency – the price has bounced between $68,000 and $33,000 since November – though MicroStrategy remains committed to a strategy that has seen it become the largest corporate bitcoin investor, ahead of Tesla.

Follow our live coverage of the crypto market

“Today, MicroStrategy is the world’s largest publicly traded corporate owner of bitcoin with over 125,000 bitcoins,” MicroStrategy CEO Michael Saylor said in an earnings release on Tuesday.

“We will continue to evaluate opportunities to raise additional capital to execute on our bitcoin acquisition strategy.”

MicroStrategy revealed in its fourth quarter financial results for 2021 that more than 10,000 bitcoins were purchased between October and December at at an average cost of $57,113.

The total hoard of 125,501 bitcoins were acquired at an average price of $30,200, marking roughly $1 billion of overall gains at bitcoin’s current price of $38,000.

During an earnings call on Tuesday, Mr Saylor said the company planned to use its crypto fortune to pursue leverage and yield opportunities as the traditional financial sector opens up to possibilities of cryptocurrency.

“In a world where, say, Goldman Sachs and Morgan Stanley and Merrill Lynch and Bank of America and CitiGroup and JPMorgan are interested and involved in the space, I think the options that will be available to us will be greater,” Mr Saylor said.

Crypto market analysts are divided over whether the recent downtrend is the beginning of a long-term bear market or simply a price correction on the way to new all-time highs.

A panel of experts and academics recently polled came to an average price prediction for 2022 of $93,717, partly fuelled by growing institutional demand for the cryptocurrency.

“US tech firm MicroStrategy is one example of institutions adding to their Bitcoin stack during this downtrend,” Marcus Sotiriou, an analyst at the UK based digital asset broker GlobalBlock, told The Independent this week.

“I think there is significant demand within this $30,000-$40,000 range and we will continue to see long term holders build up their positions in preparation for the next rally.”