Robert Steinadler, 5 months ago
MicroStrategy is one of the largest holders of Bitcoin worldwide and one of the few companies that started to hodl BTC. Despite a freezing crypto winter and the fact that the market had to forgo a Christmas rally this year, the company and Michael Saylor are steadfast.
How much Bitcoin does MicroStrategy own, and what is the stack worth at the time of writing?
The largest chunks of Bitcoin that were bought by the company were acquired during the bull run in 2021. This situation has led to an unrealized loss of about $1.8 billion. Recently, the company made several transactions that occurred before Christmas and shortly after.
According to the form 8-k published by SEC, MicroStrategy sold 704 BTC for $11.8 million to harvest a tax loss this year. The transaction occurred on December 22, one day after buying 2,395 BTC at an average price $17,871 per Bitcoin. Two days later, the company bought another stack of 810 BTC for $13.6 million.
At this point, MicroStrategy holds approximately 132,500 BTC worth $2.2 billion that were acquired at an average price of $30,481. Needless to say, the company spent over $4 billion and the unrealized loss is still significant. This is also reflected by the company’s stock price. MSTR lost more 72% since the beginning of the year 2022.
The strategy isn’t exactly new, instead of trying to time the market MicroStrategy is trying to spend time in the market. Meaning that constantly buying and increasing the position is more promising than waiting for an optimal buying opportunity.
The heavy loss that MicroStrategy took is easily explained by the fact that they bought uneven sizes. For instance, on February 2021, the company bought $1 billion worth of Bitcoin at an average price of $52,765. This is 25% of the total amount of money spent on Bitcoin, but since the price was so high at that time, it is only 14.65% of the total BTC stack that MicroStrategy holds.
Dollar cost average works best when applied evenly. Buying every month for a fixed amount of cash would have saved not only a lot of capital, but also would have resulted in a lower average price. History doesn't repeat, but it rhymes. Should Bitcoin once again rise to new highs, then MicroStrategy is still better off with an average price close to $30,000.
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