MicroStrategy’s Steady BTC Buys vs DCA: Which Bitcoin Investment Approach Delivers Better Returns

Key Takeaways

• MicroStrategy (MSTR) has been purchasing Bitcoin (BTC) since August 2020.
• They currently own more than 250,000 BTC and have profited over $5 billion.
• How do MicroStrategy’s Bitcoin purchases compare with a Dollar-Cost Averaging strategy?

MicroStrategy is one of the largest Bitcoin holders, guided by their outspoken founder Michael Saylor. The company owns more than 225,000 Bitcoin, which it has purchased at various periods since August 2020.

In this article, we will compare the profit the company has made during these purchases to a simple Dollar-Cost Averaging (DCA) strategy if they had invested the same amount of dollars each month at the start of the month.

MicroStrategy’s Average Bitcoin Purchase Price

From August 2020 until now, MicroStrategy has made numerous Bitcoin purchases. The amount of purchase was different each time, ranging from a measly $5 million to over $1 billion.

In total, Microstrategy has bought 226,500 BTC at an average price of $36,426. As of Aug. 13, they have spent $8.2 billion and currently have $13.3 billion.

Can MicroStrategy Stock Price Really Outperform Bitcoin?—CCN Reports

This results in a profit of $22,574 per BTC and a total profit of $5.113 billion, representing a profit margin of 62%.

The calculations are made at a Bitcoin price of $59,000.

The amount of BTC bought line (red) illustrates just how volatile MicroStrategy’s purchases have been, ranging from 155 BTC to over 29,600.

It is interesting to note that the amount of BTC bought did not increase significantly during the Oct-Dec 2022 period when the BTC price fell below $20,000.

Rather, it picked up in October 2023, when the bull run was confirmed with a breakout over $30,000.

Another characteristic of the purchases is that MicroStrategy did not buy much Bitcoin during the previous all-time high price in 2021.

Dollar-Cost Average Method

Dollar-cost averaging means investing the same dollar amount in a specified time. In our comparison, we will use the same amount of dollars as MicroStrategy’s actual expenditures.

There have been 48 months since the first MicroStrategy purchase in August 2020. Since MicroStrategy has spent $8.2 billion, the DCA strategy would entail them buying $172 million worth of BTC each month.

Using the opening price of each month and buying the same amount, MicroStrategy would have 298,362 BTC.

The weighted average is $27,740, they have spent 8.2 billion and they have 17.6 billion, for a profit of $9.4 billion and a profit ratio of 110%.

Since the same amount in USD is bought each time, the largest purchases have occurred near the Oct-Dec 2022 bottom, in turn lowering the weighted average.

This did not happen with MicroStrategy’s purchases; it gives a higher profit for the Dollar-Cost averaging method.

So, the data shows that the dollar-cost averaging strategy would have been significantly more profitable compared to the current one employed by MicroStrategy. The entire calculations are presented here. 

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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