Last week, Strategy made headlines by purchasing approximately 600 Bitcoin, marking its 100th acquisition since it began investing in the cryptocurrency in 2020. The Tysons Corner-based firm aimed to bolster its holdings ahead of a major conference for Bitcoin-buying companies, which is taking place this week in Las Vegas.
In a recent press release, Strategy revealed that it invested $40 million to acquire 591 Bitcoin, bringing its total holdings to 717,722 Bitcoin. With Bitcoin trading around $65,500, the firm’s total stockpile is currently valued at about $47 billion, according to CoinGecko data. The company’s latest purchase is notable as it represents the smallest acquisition of the year and reflects a cautious approach before the upcoming two-day conference.
The Las Vegas event is designed as a networking opportunity for firms involved in shaping the future of enterprise success, featuring a keynote address from Michael Saylor, co-founder and Executive Chairman of Strategy. Saylor is poised to discuss a strategic shift towards “digital credit,” reflecting ongoing developments in the cryptocurrency landscape.
When comparing the atmosphere surrounding the current conference to last year’s “Strategy World,” the contrast is stark. At that time, the firm, which holds the distinction of being the largest corporate holder of Bitcoin, was navigating significant financial challenges. Having invested more than $54 billion in Bitcoin, Strategy is now facing an unrealized loss of approximately $6.8 billion. Despite this setback, the firm has reported that its average purchase price for Bitcoin has decreased to $76,020 following the recent acquisition.
However, the company’s stock price has also been under pressure, with a 2.5% decline on Monday, bringing it down to $127. This represents a significant drop of 64% over the past six months, despite a slight recovery from a low of around $123 weeks prior. Funding for the latest Bitcoin purchase came from the proceeds of issuing common shares, with Strategy having recently accelerated its acquisitions through variable rate preferred stock (STRC), which provides an 11.25% monthly dividend.
This preferred stock strategy has implications for the firm, adding monthly costs and prompting it to conserve cash to pre-pay dividends amidst concerns of a prolonged downturn in the crypto market. Trader sentiment on Myriad, a prediction market owned by Dastan, indicated a 17% probability that Strategy might sell Bitcoin within the year—down from 33% earlier this month, following the firm’s publicly disclosed fourth-quarter loss of $12.4 billion.
As Strategy navigates these challenges, its enterprise value has declined relative to its stock price, complicating efforts to increase Bitcoin ownership per share. Despite the headwinds, the firm has managed to maintain an impressive market position, accounting for 93% of Bitcoin purchased by publicly traded companies in January, with a notable stash of 40,150 Bitcoin compared to only 3,080 among its competitors.
The upcoming conference is expected to attract attention not only to Strategy but also to other Bitcoin-buying firms, including Strive and Metaplanet, that have adopted similar financial strategies to acquire Bitcoin. As the cryptocurrency landscape continues to evolve, the interactions and discussions at this event could be pivotal in influencing future investments and market dynamics in the Bitcoin arena.
