MicroStrategy’s $563M Bitcoin Purchase: Doubling Down on BTC Dominance or a Risky Bet?
MicroStrategy, the largest corporate Bitcoin holder, announced plans to raise $563 million via a Series A perpetual preferred stock offering to buy more BTC. This move pushes its total holdings to 471,107 BTC—second only to Binance, U.S. Bitcoin ETFs, and Bitcoin’s creator.
Key Details of the Funding Plan
- Perpetual Preferred Stock: 7.3 million shares at 8% annual dividends, priced at $100/share.
- Settlement Date: February 5, 2025 (per the release).
- Use of Funds: Fueling MicroStrategy’s relentless Bitcoin acquisition strategy.
Why It Matters 💡
- CEO Michael Saylor confidently predicted Bitcoin could hit $49 million by 2045.
- The company’s balance sheet now holds 471,107 BTC.
MicroStrategy’s Bitcoin Obsession
- Current Holdings: 471,107 BTC (worth ~$49 billion).
- Goal: Overtake spot ETFs and nation-states as the #1 institutional holder.
- Strategy: Raising debt/equity to buy BTC, betting on long-term appreciation.
Market Reaction 📈
- Shares (MSTR) rose 5% post-announcement, outperforming Bitcoin’s 2% gain.
- Critics call it risky, but Saylor argues BTC is “the future of corporate treasury reserves.”
Saylor’s Bold Bitcoin Price Targets
In a recent interview, Saylor shared:
- Bear Case: $3M/BTC by 2045 (21% annual growth).
- Bull Case: $49M/BTC (37% annual growth).
Context:Bitcoin has grown ~60% annually since 2015. Even Saylor’s “bear” target is much larger than gold’s $14T market cap.
Risks & Rewards of the Strategy
- Dividend Burden: 8% annual payouts to preferred shareholders.
- Volatility: A 30% BTC drop could wipe out equity value.
- Reward: If BTC hits $1M, MicroStrategy’s stake balloons to $471 billion.
Bigger Picture: Companies like Tesla and Block follow MicroStrategy’s lead, but none match its all-in approach.
Source: Bloomberg/Eric Balchunas
Final Take: Love it or hate it, MicroStrategy’s $563M bet proves corporate Bitcoin mania is far from over.
