Earlier this week, Michael Saylor, Chairman of Strategy (formerly MicroStrategy), announced that the company had made another large Bitcoin purchase. The announcement, made on Monday, showed that the company has not abandoned its Bitcoin strategy despite bearish market headwinds. However, following the announcement, a community member known as Lindsay on
Strategy makes bank every time Bitcoin moves $1,000
Strategy’s recent purchase of 3,015 Bitcoins now seems like a small mistake compared to his holdings of over 700,000 BTC, despite being worth $204.1 million at the time of purchase. At the time of the last purchase, the company currently holds 720,737 BTC, maintaining its position as a public company with the largest BTC holdings in the world.
Amid these revelations, Lindsay’s post pointed out that the Strategy is actually making a lot of money every time the Bitcoin price moves. For example, every $1,000 increase in the price of Bitcoin adds a whopping $720 million to the company’s position.
What this means is that the company is in a position where even a small recovery could mean huge profit margins for the company. But the opposite is also true. Because if the price of Bitcoin falls by $1,000, the company will lose $720 million in BTC holdings.
Another interesting fact about the company’s holdings is that recent purchases were made for 3,015 BTC, at an average price of $67,700. As a result, the average price of the company’s total BTC holdings has now moved to $75,985 per BTC.
Bitcoin price trading below $74,000 means the company is currently having trouble investing in BTC. The company has spent $54.77 billion to purchase 720,737 BTC since 2020. However, according to Bitcoin Treasury data, the entire stack is currently worth about $52.49 billion, representing a loss of more than 4% on its holdings.
The company’s stock did not escape the onslaught, as it fell 14.77% year-to-date, matching the 24% decline in the price of BTC during this period. Saylor also announced that the company’s STRC dividend rate increased from 11.25% in February to 11.50% in March as the company plans to transition from using common stock to issuing preferred stock for Bitcoin purchases.
Featured image by Dall.E, chart by TradingView.com
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