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MicroStrategy Bitcoin Buying Strategy Has Boosted Company Stocks More Than Microsoft & Google Combined

Last Updated February 7, 2024 11:48 AM
Teuta Franjkovic
Last Updated February 7, 2024 11:48 AM

Key Takeaways

  • MicroStrategy starts 2024 with an 850 BTC purchase, reinforcing its commitment to the cryptocurrency.
  • Bitcoin investments drive the company’s net income to $89.1 million in 2023, compared to 2022’s loss.
  • The company sees regulation, institutional adoption, and high growth in the next 15 years.

MicroStrategy has started the year with another significant purchase of Bitcoin  (BTC), as disclosed by the company.

In January, under the guidance of CEO Michael Saylor, the firm acquired 850 BTC for a total of $37.5 million, a transaction Saylor shared details of on X. This latest acquisition was also highlighted in the company’s fourth-quarter earnings  presentation for 2023, reaffirming MicroStrategy’s ongoing commitment to Bitcoin.

MicroStrategy Reports Substantial BTC Acquisitions in 2023

During the fourth quarter of 2023 earnings  call on February 6, MicroStrategy’s Chief Financial Officer, Andrew Kang, revealed that the company had made significant Bitcoin investments throughout the year, acquiring 56,650 BTC at an average price of $33,580 each.

This strategic move contributed to a notable financial turnaround for the business software firm, which reported a net income of $89.1 million for the year, a stark contrast to the loss of $249.7 million in 2022. However, the company experienced a slight decline in revenue, which fell by 6.1% to $124.5 million, as detailed in its statement.

MicroStrategy Executive Chairman Michael Saylor attributed the company’s successful performance in 2023 to investors acknowledging  the overarching trend of assets undergoing a “digital transformation.”

“2024 is the year of the birth of Bitcoin as an institutional-grade asset class; in fact, it’s the first new asset class of the modern era.”

Saylor further commented  that the next 15 years are set to be a period of regulation, institutional involvement, and high growth for Bitcoin, marking a significant departure from its trajectory over the previous 15 years.

MicroStrategy Shares Surge 300%

In December 2020 , MicroStrategy made history as the first publicly traded company to invest in Bitcoin as part of its capital allocation strategy, resulting in its share price soaring by over 300% . This growth starkly contrasts with the approximately 95% increase seen in tech giants like Microsoft and Google during the same period.

Michael Saylor highlighted that the introduction of spot Bitcoin exchange-traded funds (ETFs) marked a pivotal moment, transforming Bitcoin from merely a medium of exchange to a recognized store of value. According to Saylor, this shift addresses and mitigates previous critiques of Bitcoin’s effectiveness as a currency.

Microstrategy growth
Credit: MicroStrategy

Saylor commented :

“We don’t need to address any of the currency criticisms anymore. Simply as a store of value, there’s no reason Bitcoin can’t continue to outperform and 100X from where it is right now.”

MicroStrategy Focuses on “Building Software” Amidst ETP Competition

Despite concerns from cryptocurrency market experts that Bitcoin exchange-traded product (ETP) providers like BlackRock and Fidelity could potentially erode MicroStrategy’s market share, Michael Saylor appeared unfazed by the prospect of competition from traditional finance entities.

Saylor affirmed  that MicroStrategy’s focus would remain on its core mission to “create software.” Additionally, the company plans to collaborate with Bitcoin developers and contribute to developing Bitcoin-based layer-2 networks and other initiatives within the ecosystem, aiming to enhance its revenue streams in the future.

Concluding the earnings call, Saylor reiterated  MicroStrategy’s commitment to expanding its Bitcoin holdings, signaling ongoing confidence in the cryptocurrency as a key asset for the company’s strategy.

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