Key Takeaways
- MicroStrategy began aggressively investing in Bitcoin in 2020.
- It currently holds 439,000 Bitcoin worth $45 billion.
- The firm plans to increase its leverage and may diversify its assets in 2025.
MicroStrategy CEO and Bitcoin (BTC) maximalist Michael Saylor has said the firm would like to build “intelligent leverage” following the completion of its bold “21/21” strategy to raise $42 billion in capital to fuel Bitcoin purchases.
A New Strategy
In late October 2024, MicroStrategy announced its “21/21” plan to raise $42 billion from equity and fixed-income securities offerings by 2027, which will finance its BTC investments.
It has since more or less achieved that aim, and as of Dec. 23, it commands an absurd 444,262 BTC worth almost $42.5 billion. Speaking with Bloomberg, Saylor explained:
“When we announced that, it wasn’t clear how enthusiastic the capital markets would be, but we got a very enthusiastic reception. We went faster than we had thought we were going to go on Oct. 30.”
At an average purchase price of $61,725 per BTC, the firm’s investments are in a tidy 65.85% profit. So, what’s next?
According to Saylor, it’s time to switch focus and target raising capital through fixed-income securities instead of just relying on equity and convertible bond sales to fund the investments.
“We have $7.2 billion dollars of converts, but $4 billion of them are essentially equity, they’re through the strike price, the call price, and they are trading with a delta of approximately 100%, they are looking like equity,” Saylor said.
Upon reaching its capital raise goal, Saylor says it’ll revisit its plans and implement a new one, “subject to market conditions, at the time.”
Mulling whether or not it will be the convertible, fixed-income, or equity markets, Saylor expects that it’ll shift heavily toward fixed income in Q1 2025 and ahead.
Bankrupting MicroStrategy?
Though there were concerns that the firm’s aggressive strategy was unsustainable, Ki Young Ju, CEO of on-chain analytics firm CryptoQuant, believes it would take a world-ending catastrophe to bring MicroStrategy down.
The ever-skeptical Peter Schiff doesn’t share this view, and says that “ultimately”, Bitcoin will crash, MicroStrategy will go bankrupt and “creditors are going to end up with the company.”
Cautioning that the firm may be becoming a little more deleveraged than he’d prefer, Michael Saylor says MicroStrategy is eyeing up “building more intelligent leverage” for common stock shareholders, which could imply a diversification of its assets.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
