MicroStrategy’s fortunes rise as bitcoin sets new record

Tysons-based tech company MicroStrategy, the world’s largest corporate holder of bitcoin, has been riding a recent surge in the cryptocurrency, which hit an all-time high of $69,324.58 Tuesday morning before falling off somewhat in the afternoon.

As of Feb. 25, MicroStrategy and its subsidiaries held a total of 193,000 bitcoins, which was worth $13.38 billion as of 10 a.m. Tuesday, when the cryptocurrency hit the all-time peak. Bitcoin’s previous high was $69,225, which it hit on Nov. 10, 2021.

The company’s 193,000 bitcoins were purchased for approximately $6.09 billion in total, averaging $31,544 per bitcoin, including fees and expenses.

As of 4:30 p.m. Tuesday, bitcoin was selling for $64,045.35 per bitcoin on the nation’s largest cryptocurrency exchange, Coinbase.

MicroStrategy shares were trading for $1,138.64 at 3:11 p.m. Tuesday, down from $1,244.19 at market open. During the past 52 weeks, its stock price has ranged from $188.30 to $1,359.91, according to Yahoo! Finance.

In a Securities and Exchange Commission filing on Feb. 26, MicroStrategy reported that, during the period from Feb. 15 to Feb. 25, it and its subsidiaries purchased approximately 3,000 bitcoins for about $155.4 million in cash, at an average price of about $51,813 per bitcoin, including fees and expenses.

One notable cause of the bitcoin surge is the SEC authorization in January allowing 11 applicants, including financial firms BlackRock and Fidelity, to offer exchange-traded funds tied to bitcoin. ETFs allow investors to buy shares in a group of assets rather than purchasing ownership of the assets directly. Bitcoin ETFs attracted more than $7 billion of net inflows in less than two months, according to Bloomberg.

Additionally, Bitcoin is set to become scarcer, which is also driving demand. A “halving,” which halves the amount of bitcoin that cryptocurrency miners receive, is set for later this year. (Transactions on bitcoin’s blockchain are verified by miners who earn bitcoins for the service.)

“Breaking all-time highs, with the current momentum in spot ETFs as well as the upcoming halving narrative, would likely awaken true FOMO — fear of missing out — among participants currently watching markets from the sidelines,” Stefan von Haenisch, head of trading at OSL SG Pte., told Bloomberg.

MicroStrategy has pursued bitcoin as an investment strategy since 2020, led by Executive Chairman Michael Saylor, a charismatic billionaire cryptocurrency whale and social media influencer who stepped down as CEO after the company’s August 2022 earnings report, when the company disclosed that it had paid a total of $3.977 billion for its bitcoin, which at that time had fallen to a market value of about $2.451 billion. At that point, MicroStrategy also had taken on about $2.4 billion in loans and debt to acquire bitcoin. At points in 2022, the currency fell below $20,000 to prices it had not seen since 2020.

Saylor has been wont to make dramatic predictions about bitcoin prices to his millions of social media followers, once saying he thought the cryptocurrency could eventually fetch as much as $6 million per coin. When bitcoin’s value nosedived below $17,600 in June 2022, Saylor tweeted an edited photo of himself sporting a McDonald’s hat, serving fries and a hamburger. “Monday morning is time to get back to work. #Bitcoin,” he tweeted.

Saylor is no stranger to high-stakes gambles. He lost $6.1 billion in a single day in 2000 amid the dotcom bubble burst, making him the answer to a Trivial Pursuit question.

MicroStrategy announced its first bitcoin purchase in August 2020, saying it had converted $250 million from its cash holdings to more than 21,000 bitcoins, making it one of the first public companies to convert its cash treasury reserves into cryptocurrency as a store of value.

Virginia Business Editor Richard Foster contributed to this story.