MicroStrategy’s Bitcoin Anniversary: A Look Back at Its Acquisitions and Market Influence

Key Takeaways

• MicroStrategy (MSTR) has purchased Bitcoin since August 2020.
• The firm has purchased over 15,000 BTC five times.
• Is there a correlation between these purchases and MSTR’s stock price?

On Aug. 11, 2020, MicroStrategy made headlines when it boldly stepped into the Bitcoin (BTC) arena for the first time and ushered in a new era for the industry.

Guided by Michael Saylor, MicroStrategy quickly ascended to become one of the largest public holders of Bitcoin, fundamentally altering how corporations think about treasury management and transforming the entire industry’s approach to digital assets.

As we mark the fourth anniversary of this decision, let’s dive into some of MicroStrategy’s biggest Bitcoin buys and explore how these strategic moves rippled through the market.

The Purchase That Started It All

The most monumental purchase  MicroStrategy has ever made was its first on Aug. 11, 2020.

The company made headlines when Chairman Michael Saylor announced that the Nasdaq-listed firm had acquired 21,454 Bitcoins for $250 million. This investment marked the start of a strategic shift, integrating Bitcoin into MicroStrategy’s treasury strategy.

Saylor called Bitcoin a “dependable store of value,” and a hedge against inflation :

His vision was clear: to set a new standard for corporate treasury management and showcase the company’s confidence in Bitcoin’s future. And set a new standard it did—MicroStrategy has since emerged as one of the top-performing tech companies in the world.

Can MicroStrategy Stock Price Really Outperform Bitcoin?—CCN Reports

Following the announcement, Bitcoin’s price surged, reflecting growing confidence in its legitimacy as an asset. MicroStrategy’s stock also climbed as investors applauded the bold move. This initial purchase paved the way for MicroStrategy to become a leading public holder of Bitcoin, reshaping industry norms.

The Top 5 Bitcoin Purchases

Bitcoin purchases have been an integral part of MicroStrategy’s stock performance.

Below are the top five biggest Bitcoin purchases  made by MicroStrategy. They are ranked by the amount of Bitcoin purchased rather than the total price at the time of purchase.

1. Dec. 21, 2020 – 29,646 BTC
2. Aug. 11, 2020 – 21,454 BTC
3. Feb. 24, 2021 – 19,452 BTC
4. Sept. 14, 2020 – 16,796 BTC
5. Nov. 30, 2023 – 16,130 BTC

Looking at the stock performance, out of the five weeks when the company made its largest Bitcoin purchases, MicroStrategy MSTR stock has rallied four times (marked by the white icons). The lone exception was the week of the third biggest purchase (black icon), when MSTR took a tumble, falling over 13%.

While MSTR’s price jumped 80% of the time following a big Bitcoin buy, the relationship isn’t as straightforward as you might think. The price hikes don’t always align perfectly with the purchase size.

MSTR’s price swings have ranged from a modest 5% to a hefty 21%.

In fact, the most impressive spike was a 21% surge in August 2020. This was followed by a 12% jump in September 2020.

While it’s clear that MicroStrategy’s stock performs exceptionally most of the time, how does Bitcoin perform?

Effect on the BTC Price

Bitcoin’s price performance mirrors MicroStrategy’s. BTC prices also surged four out of five times, following the company’s major Bitcoin buys. The lone exception was in February 2021, during the third-largest purchase, when its price took a hit.

But here’s the kicker: Bitcoin’s biggest jump came with the largest purchase, back in December 2020, where it saw a 12% increase. This contrasts MicroStrategy’s stock, where the largest spike wasn’t necessarily tied to the biggest purchase.

With this in mind, it is worth comparing to see if there’s a growing connection between MicroStrategy’s stock price and Bitcoin’s value. As MicroStrategy’s Bitcoin holdings have increased, one would expect their price movements to become more intertwined.

It looks like that’s what’s happening. Before MicroStrategy’s first Bitcoin purchase in August 2020 (marked in black), there was little to no correlation between MSTR and Bitcoin prices. The correlation coefficient (depicted in blue) oscillated around zero, showing no real relationship between the two assets.

But post-August 2020, things have changed dramatically. The correlation has turned positive and, at times, even hit a perfect positive score. This indicates that shifts in one asset’s price now closely mirror movements in the other.

This pattern is evident when comparing the price charts: MSTR (white) and Bitcoin (orange) have been closely aligned, especially noticeable during the current bull run. The synchronization suggests that as MicroStrategy’s Bitcoin holdings grow, its stock price increasingly reflects Bitcoin’s performance, highlighting a strengthening bond between the two.

It’s worth noting that there have been periods when the correlation falls to 0 or even negative (black circle). Interestingly, all of them have marked local or absolute Bitcoin bottoms. This bodes well for the future BTC and MSTR prices, since the correlation is currently at 0.20.

So, there is a positive correlation between large purchases from MicroStrategy, the Bitcoin price, and the MSTR price. The correlation between MSTR and BTC has also been positive and is strengthening with each purchase.

About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

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