- MicroStrategy bought another 1,000 bitcoins, bringing its holdings to 140,000 at an average price of $28,000.
- The total investment is now $4.2 billion, and the company’s fate is tied to the price of bitcoin
- CEO Saylor is still very optimistic, but he doesn’t care about risk management
- For investors, someone may buy Bitcoin directly
MicroStrategy is at it again.
The software company, which is now essentially a bitcoinThe holding company, bought another 1,045 bitcoins. The company now holds 140,000 coins, with Michael Saylor announcing on Twitter the latest investment to the world on Wednesday.
MicroStrategy has an additional 1,045 # Bitcoin For about $29.3 million at an average price of $28.016 per bitcoin. As of 4/4/2023 @employee Owns 140,000 bitcoins acquired for $4.17 billion at an average price of $29,803 per bitcoin. $MSTR https://t.co/IBufTxalnv
– Michael Saylor (@saylor) April 5, 2023
MicroStrategy’s stock of 140,000 Bitcoins is the largest holding of any public company. It makes up 0.72% of the entire supply, which means they own 1 in every 138 bitcoins currently in circulation.
It’s a long way to go for Satoshi Nakamoto and his approximate stash of 1 million coins (5.2% of supply), but Saylor is on his way.
The latest purchase was secured at an average price of $28,016 per bitcoin, bringing the average price to $29,803, which means the company is a bit overwhelmed with an investment of $4.17 billion.
Michael Saylor does not do risk management
CEO Saylor’s conviction remains unchanged, while his disdain for portfolio diversification hasn’t changed either. For me, whatever your thoughts on Bitcoin as an investment, it’s hard to get involved with an investment of this magnitude.
The danger is high, with the company’s fate now well and truly in the hands of the fickle crypto gods. A look at the stock’s price action shows how closely it is now correlated with Bitcoin. MicroStrategy shed three-quarters of its value last year as bitcoin plummeted amid a bear market, but has doubled this year as bitcoins make a comeback.
Saylor’s conviction may be admirable, but his risk management is not. This is especially relevant when looking at his rhetoric on advising people on what to do with their money — again, nothing to do with bitcoin, but the failure to understand the risk tolerance and financial conditions of ordinary people is jarring:
Take all your money and buy Bitcoin. Then take all your time to figure out how to borrow more money to buy more Bitcoin. Then take all your time to figure out what you can sell to buy Bitcoin.
And if you absolutely love this thing and don’t want to sell it, mortgage your home and buy bitcoin with it. And if you have a business that you love because your family has been in the business – if it’s been in the family for 37 years and you can’t afford to sell it – mortgage it, fund it and convert the proceeds into the hardest form of money on earth, Bitcoin.”
Interview conducted in March 2021. Bitcoin was trading north of $56,000 at the time, nearly double what it is currently. I sincerely hope no one listens to this billionaire’s advice and mortgages his home or business.
And again, this is not a discussion about the merits or the price of bitcoin. The same logic would hold if the bitcoin price was now $200,000 per coin. This doesn’t have to be said, but for the record, staking your entire future and financial well-being on a single asset – especially one as volatile as Bitcoin – is fine, Not nimble.
However, Saylor is intent on doing just that with MicroStrategy. At least it’s a little less risky than betting on his personal future. But the fact is that with such a huge investment – 4.17 billion dollars! MicroStrategy is now a Bitcoin holding company.
For investors, I’m not sure of the appeal here, as one can only buy Bitcoin directly. But for Saylor, he didn’t seem to care. is all in.