MicroStrategy (Nasdaq: MSTR), the business-intelligence software company led by Michael Saylor, has been transformed into a Bitcoin holding company.
Michael Saylor is one of the most vocal supporters of bitcoin and is CEO of MicroStrategy, the company with the largest bitcoin holdings in the world. The CEO has always been a big proponent of the digital asset, taking both a personal and professional stake in the asset.
December 9th, 2021 was the last time the company purchased Bitcoin. The company paid about $82 million in cash for 1,434 Bitcoins, at an average price of $57,477 per bitcoin.
As of Dec. 31, the company held approximately 122,477 bitcoins, purchased at an average price of $29,861 per bitcoin. Bitcoin in the last day of 2021 was trading at about $47,169, valuing the MSTR Bitcoin trove at approximately $5.87 billion.
As of Jan 21, 2022, the company still held the same number of bitcoins, approximately 122,477. Bitcoin is currently trading at about $38,440, valuing the MSTR Bitcoin trove at approximately $4.78 billion.
During 2022, the value of MicroStrategy’s Bitcoin portfolio decreased from $5.87 billion to $4.78 billion, or $1.09 billion. In 2022, the portfolio decreased by 18.56%.
Overall in the portfolio level, MicroStrategy is up 27.5% in their investments over 3 years. However, the majority of the paper gains came from investments in 2020. In fact, if we ONLY measure the performance of MicroStrategy’s trading in 2021, they lost -21.1% at current prices.
In 2021, MicroStrategy purchased 52,007 Bitcoins at an average price of $48,691 per Bitcoin. Just for comparison, the current price of Bitcoin is $38,440.
If the price of Bitcoin goes below the total average purchase price of $29,861, then MicroStrategy will be in deep trouble.
The company, like its CEO, has no plans to sell is Bitcoin. Instead, it has begun looking towards new ways to generate yield from the investment, which Saylor revealed at an investor day presentation held last week.
Note: The returns presented above should be lower if we consider the cost of debt that MicroStrategy used to buy Bitcoin.