In a significant development, Strategy has announced its largest Bitcoin purchase in over 100 days, spending nearly $1 billion last week. According to a company press release, the Virginia-based firm invested $963 million to acquire 10,624 Bitcoin, primarily funded through issuing common stock. This latest acquisition brings Strategy’s total holdings to approximately 660,600 Bitcoin, which currently has an estimated value of about $60 billion.
This recent purchase marks a stark increase compared to Strategy’s previous buying activities and is equivalent to the total amount they had purchased since mid-September when Bitcoin was trading at approximately $115,000. On Monday, shares of Strategy were reported to be little changed at $180, reflecting a 7.5% increase over the past five trading days, despite experiencing a 50% decline in stock price over the last six months. The recent fluctuation in Bitcoin prices has played a role in this stock movement, as Bitcoin hovers near the $90,000 mark.
Analysts from Cantor Fitzgerald have noted a change in Strategy’s Bitcoin purchasing strategy, which has caused some apprehension among investors; however, they described these fears as largely unfounded. Concerns were raised regarding Strategy’s reluctance to purchase Bitcoin during the recent price dips, leading some analysts to lower their price targets for the company. These analysts also highlighted a bearish outlook related to Strategy potentially being excluded from MSCI indices, stemming from its discussions with the index provider about an upcoming decision.
TD Cowen analysts echoed this negative sentiment surrounding MSCI indices but referred to Strategy’s establishment of a $1.4 billion “cash reserve” as a prudent measure. This reserve creates a buffer for making further dividend payments and suggests potential for more aggressive investment actions in the future.
Interestingly, this substantial Bitcoin purchase follows the company’s previous announcement regarding the $2.5 billion closure of STRC, which was one of several preferred shares offerings that included dividends. In conjunction with the common stock issuance, Strategy also offered $44 million worth of STRD, which provides a 10% annual, non-cumulative cash dividend.
Strategy’s recent actions stand in contrast to other firms that have adopted similar Bitcoin acquisition strategies. Metaplanet, the largest corporate Bitcoin holder in Japan, is reportedly preparing to offer preferred shares, though it has not made any new purchases since October. Meanwhile, Twenty One Capital, a Bitcoin investment firm backed by Tether and Softbank, is set to begin trading on the New York Stock Exchange under the ticker symbol XXI. The company’s co-founder, Jack Mallers, recently indicated on social media that their holdings—amounting to 43,500 Bitcoin—are being actively managed, with a current value around $3.9 billion.
The unfolding situation represents a complex landscape for cryptocurrency investments, with Strategy positioning itself strategically in the market while analysts scrutinize its approaches and future prospects.
