In a move signaling a potential expansion of its bitcoin holdings, Strategy co-founder Michael Saylor hinted at an imminent purchase over the weekend. His social media post featured the phrase “think bigger” alongside the company’s bitcoin acquisition tracker, a tool that has become synonymous with the firm’s previous major acquisitions since it began its investment journey in August 2020.
Since its initial foray into bitcoin, the company has engaged in 105 separate purchases of the cryptocurrency. Their most recent acquisition occurred on April 6, when they added 4,871 BTC to their portfolio, spending a substantial $329.8 million. Currently, Strategy boasts a total of 766,970 BTC, which were acquired at a blended cost basis of approximately $75,644 each. This figure places their holdings roughly $5,000 above the current market price, resulting in an astonishing $14.5 billion in unrealized losses, a detail revealed in their recent first-quarter SEC filing.
The pace at which Strategy is acquiring bitcoin is indeed remarkable. In March alone, they amassed 46,233 BTC, while the global mining network produced only about 16,200 BTC in the same timeframe. This means that Strategy absorbed nearly three times more bitcoin than what was produced by all miners globally, cementing its position as a dominant player in the market.
Furthermore, Saylor disclosed key financial metrics regarding Strategy’s STRC preferred equity product, which plays a crucial role in facilitating their bitcoin purchases. The product currently offers a breakeven annual return rate of approximately 2.05%. If bitcoin appreciates at a rate surpassing this threshold, Strategy could indefinitely cover its preferred dividends without the need to issue new MSTR shares. However, this model also exposes the company to significant risks; a relatively low 2% hurdle assumes that bitcoin will not experience prolonged periods of stagnation or decline, despite ongoing dividend compounding.
STRC has proven to be a vital mechanism for Strategy’s aggressive acquisition strategy, attracting hundreds of millions in new investments, particularly around its recent ex-dividend date. The continued appetite from investors for STRC will determine how long the company can maintain its intensive purchasing strategy.
Bitcoin continues to show strength in the market, trading at $71,800 according to CoinDesk data. This represents a 7.9% increase over the past week, maintaining a position above $70,000 for four consecutive days following a ceasefire announcement in Iran.
As the market awaits details of the next potential acquisition, the question remains: will Saylor’s call to “think bigger” result in a transaction substantial enough to influence market dynamics? Given Strategy’s current rapid pace of more than 40,000 BTC per month, it is plausible that their next filing could push total holdings well beyond the 800,000 BTC mark before the end of April.
