Key Points
- MicroStrategy plans to acquire $42 billion of Bitcoin in the next three years.
- Analysts suggest MicroStrategy’s stock could become a de-facto Bitcoin ETF.
MicroStrategy, led by Michael Saylor, revealed plans to purchase $42 billion of Bitcoin within the next three years. This announcement was made in anticipation of the 2028 halving cycle.
According to Saylor, the firm aims to raise $42 billion of capital over the next 3 years, which will be composed of $21 billion of equity and $21 billion of fixed income securities.
MicroStrategy’s Bitcoin Acquisition
As of October 2024, MicroStrategy possessed 252,220 BTC, bought for $9.9 billion. The company’s Bitcoin stash is currently valued at over $18.15 billion, indicating $8 billion in unrealized gains.
However, the firm’s $42 billion Bitcoin acquisition plan will be partially executed through a $21 billion at-the-market stock issuance program. This has led some analysts to suggest that MicroStrategy’s stock could transform into a Bitcoin ETF.
Quinn Thompson, founder of Lekker Capital, believes that the firm is essentially converting its stock into a de-facto ETF. This would enable the company to issue stocks in the secondary market to fund its Bitcoin acquisition, similar to how US spot Bitcoin ETFs operate.
MicroStrategy’s Performance
MSTR holders appear to be the primary beneficiaries of the recent update. Since adopting the Bitcoin strategy in 2020, MSTR has been the best-performing S&P stock. Despite the firm’s Q3 loss of $19.4 million, MSTR’s performance has outshone Bitcoin’s.
On a year-to-date basis, MSTR was up by 250%, significantly more than Bitcoin’s 60% gains. In Q3, MSTR surged about 20%, while Bitcoin ended the quarter with less than 1% gains.
From an investor’s perspective, holding MSTR seemed to provide better returns than holding Bitcoin.
As of now, MSTR is valued at $247. Whether it will reach a new yearly high remains to be seen, especially considering Bitcoin’s tight consolidation above $72K.
