MicroStrategy Increases Bitcoin Holdings by $51 Million, Peak Value at $124,000 per Bitcoin.

In the ever-evolving world of finance, one company has made a bold move that could reshape the landscape: MicroStrategy. The American business intelligence firm has been making headlines by investing heavily in Bitcoin, viewing it as a robust and promising alternative to traditional assets like liquidities and bonds.

MicroStrategy, under the visionary leadership of CEO Michael Saylor, sees Bitcoin as digital gold and expects the asset to significantly surge beyond its current all-time high. Despite the high price of Bitcoin at $124,000, the company continues to invest, demonstrating a strong conviction in Bitcoin's future expansion.

This strategic move forms part of MicroStrategy’s corporate investment strategy, which involves an aggressive accumulation of Bitcoin as a long-term treasury asset. The company primarily finances these purchases through issuing equity and debt securities, leveraging its balance sheet to maximise Bitcoin exposure.

A key aspect of this strategy is the massive accumulation of Bitcoin. As of mid-2025, MicroStrategy holds over 629,000 BTC (around 3% of total supply), acquired since August 2020. This includes recent purchases even when Bitcoin prices dipped, signalling a firm belief in the long-term value growth of the asset.

The funding for these Bitcoin purchases comes primarily from issuing new shares, convertible bonds, and preferred stock. This approach significantly dilutes existing shareholder equity but enables the company to scale its Bitcoin holdings rapidly without facing margin calls that retail investors often encounter.

By using financial leverage and continuously buying Bitcoin, MicroStrategy’s stock behaves like a leveraged call option on Bitcoin. Its share price exhibits amplified sensitivity (~1.7× beta) to Bitcoin price movements, attracting bullish investors seeking high Bitcoin exposure through a publicly traded vehicle.

The long-term macro hedge thesis underpinning MicroStrategy’s strategy assumes Bitcoin’s price will appreciate substantially, justifying short-term shareholder dilution and risk exposure. The success of this strategy hinges heavily on Bitcoin price trajectories and effective liquidity risk management, as downturns can pressure net asset values and preferred dividends exceed $9.6 billion annually.

Unlike individual leveraged investors, MicroStrategy can hold through Bitcoin price declines without margin calls, thanks to the structural financing choices that prioritise long-term asset accumulation over short-term profitability.

The market often prices MicroStrategy’s stock at a premium to its net asset value, reflecting expectations of ongoing Bitcoin accumulation and future asset growth rather than just current holdings. This creates an embedded optionality and growth hypothesis valued by investors.

As MicroStrategy continues to invest in Bitcoin, the question remains: will other companies follow suit? So far, Tesla and some small businesses have made investments, but none have been as consistent as MicroStrategy. The $51 million acquisition, MicroStrategy's latest investment, underscores its commitment to Bitcoin investment and sends a strong message to the market, boosting investor and institutional confidence in Bitcoin as a reliable store of value.

References:

[1] Yusuf, N. (2021). MicroStrategy's Bitcoin Strategy: A Game-Changer in Corporate Investment. Forbes. Retrieved from https://www.forbes.com/sites/naseemyusuf/2021/08/11/microstrategys-bitcoin-strategy-a-game-changer-in-corporate-investment/?sh=28f46249253e

[2] Carlson, K. (2021). MicroStrategy's Bitcoin Bet: A Corporate Strategy with High Rewards and Risks. Investopedia. Retrieved from https://www.investopedia.com/news/microstrategys-bitcoin-bet-corporate-strategy-high-rewards-and-risks/

[3] MicroStrategy Investor Relations. (n.d.). Bitcoin Holdings. Retrieved from https://ir.microstrategy.com/static-files/9206512f-e85b-4592-9e6f-1c81d521147b

[4] Fischer, J. (2021). MicroStrategy's Bitcoin Strategy: A Bold Bet with Significant Risks. Barron's. Retrieved from https://www.barrons.com/articles/microstrategy-bitcoin-strategy-51625519611

MicroStrategy Increases Bitcoin Holdings by $51 Million, Peak Value at $124,000 per Bitcoin.