A significant financial move has been announced by Strategy, a firm based in Tysons Corner, Virginia, which recently acquired $43 million worth of Bitcoin. This purchase, the largest in nearly a month, involved acquiring 390 Bitcoin. Following this transaction, the firm’s total Bitcoin holdings have now reached approximately 640,800, representing a market value of around $73.6 billion based on recent trading prices around $114,800.
After the acquisition was disclosed, Strategy’s shares increased by 1.9%, trading at $294, although this figure still reflects a 4.8% decrease from the previous month’s price of $314. The latest purchase was funded through the issuance of preferred shares rather than the more traditional route of common shares. This strategic shift in funding aligns with recent market trends, where easing geopolitical tensions between the U.S. and China have created a more favorable environment for risk assets like cryptocurrencies.
In recent sentiment analysis conducted by Myriad, a unit of Dastan, a strong majority of respondents—over 71%—expressed optimism regarding Bitcoin, predicting it could rebound to $120,000, contrary to forecasts by some, including crypto entrepreneur KBM, who anticipate a drop to $100,000.
Historically, Strategy has favored issuing common shares to finance its Bitcoin acquisitions, often at a premium to its holdings. However, since September 29, when the company announced a $22 million Bitcoin purchase, it has refrained from issuing common shares, having previously raised $128 million, which has provided them with additional liquidity as dividend payments are on the horizon.
This year, Strategy has introduced several types of preferred shares to support its Bitcoin purchases, some involving quarterly dividend payments. Despite halting common share issuances, the firm’s recent Bitcoin investments have been on the smaller side, with totals of 196 Bitcoin, 219 Bitcoin, and now 390 Bitcoin in recent transactions. These figures mark a trend towards more modest purchases than in previous years.
Co-founder and Executive Chairman Michael Saylor highlighted the significance of these acquisitions, referring to the day as “Orange Dot Day” on social media while sharing a historical chart of the company’s Bitcoin purchases. Analysts at Citi have described Strategy as a “bellwether of BTC’s potential upside and downside momentum,” giving its stock a target price of $485, while cautioning that any downturn in Bitcoin prices could lead to significant losses for shareholders.
In their analysis, Citi also noted that the premium at which Strategy trades in relation to its Bitcoin holdings could remain stable if Bitcoin continues to gain traction. Recently, this premium has narrowed from 1.25x to 1.16x, as indicated by data from Bitcoin Treasuries, highlighting ongoing volatility in the cryptocurrency market and the firm’s strategic positioning amidst these fluctuations.
