MicroStrategy’s Bitcoin Play: Will Michael Saylor Company Benefit if BTC Market Peaks in December?

Key Takeaways

• MicroStrategy has purchased an additional 9,245 BTC using proceeds from convertible notes.
• MSTR’s move comes after a substantial $800 million convertible offer.
• Experts predict a possible Bitcoin market peak between December 2024 and February 2025.

MicroStrategy, the largest public holder of Bitcoin, has again made substantial investment in the crypto. The company has added 9,245 BTC to its portfolio, shortly after releasing an $800 million convertible offer.

However, Bitcoin’s price weakness is leading MSTR stocks to trade in the red. Neverthelesss, experts predict the current bull cycle could peak by February 2025. Can MicroStrategy leverage it?

MicroStrategy Continues Bitcoin Accumulation

MicroStrategy announced on March 19 that it has added 9,245 BTC to its portfolio. The company reportedly spent around $623 million, at an average price of roughly $67,382 per BTC. This acquisition raises MicroStrategy’s total Bitcoin holdings to 214,246, bought at an average price of $35,160 per coin, for a total of around $7.53 billion.

The company is utilizing funds raised through convertible notes and excess cash reserves, following the announcement  of an $800 million convertible offer.

MicroStrategy’s strategy is a high-stakes bet on the future price of Bitcoin. The company’s recent acquisition, financed through convertible notes, has integrated Bitcoin into its long-term investment strategy. Convertible notes are bonds the holder can convert into a specified number of shares, in this case, of MicroStrategy. While it is a flexible financing option, will it bear fruit for the company?

The Numbers Behind the Bet

To put MicroStrategy’s Bitcoin gamble into perspective, consider its current holdings. It has 214,246 BTC valued at about $13.59 billion, according to data  from Bitcoin Treasuries. It also has a market capitalization of $24.05 billion at the time of writing (March 20 2024). This positions MicroStrategy’s investment at 1.8 times its net gain, occupying 56.51% of the market cap.

However, the Bitcoin market can be volatile. In the week leading up to March 20, BTC fell by around 13%. MSTR shares are also in the red as a result. This comes weeks after MSTR stocks hit a one-year high. Analysis by Rekt Capital  suggests Bitcoin’s price could peak in the current bull market between 518 and 546 days after the halving, which is scheduled for April.

However, signs of an accelerated cycle could see this timeframe halved, predicting a market peak between December 2024 and February 2025. The prediction also hinges on the trend of Bitcoin reaching new all-time highs. Bitcoin’s last peak was over $73,000, reached on March 14.

MSTR’s Risk-Return Strategy

MicroStrategy has positioned itself as a Bitcoin bull. So much so that the company’s market capitalization is closely tied to the crypto trajectory. While its stock remains under pressure due to Bitcoin’s recent drop below $65,000, the company could benefit from the upcoming peak.

MicroStrategy’s aggressive Bitcoin strategy is a high-risk, high-reward play. As the market looks toward the end of 2024 and early 2025 for potential peaks, MicroStrategy will be in focus.

About the Author

Shraddha Sharma

Shraddha has around five years of experience as a financial journalist, focusing largely on the Asian markets. Starting her career in Mumbai, India, as a news trainee and producer, she quickly found her niche in crypto. She is keen on learning how emerging technologies affect the broader markets and enjoys explaining complex financial ideas in a way that's easy to understand.

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