Previously, I have analysed El Salvador's positions on Bitcoin, however, the numbers can quickly become outdated due to the high volatility of the world's leading cryptocurrency, at this time when we are on the verge of going to new highs, this article serves as a reference on the strategy of one of the most recognised organisations in the crypto world, MicroStrategy. I wish to analyse their current situation on their invention in BTC, as well as take a look at their actions.
This is one of those whales that you really need to pay attention to if you dive into the crypto realm, it is a company that aims to buy to hold Bitcoins over time, knowing that the potential of the main cryptocurrency in the financial world, an alternative that is looking increasingly clear, but that few would bet on in 2020 before the big ETF news and even before the previous bull cycle, in fact, this is an important moment because that cycle BTC had a sharp pullback and many were losing hope of a rebound, however, visionaries like Michael J. Saylor did the unthinkable, start buying BTC and holding them.
Just as I did in the article on El Salvador, it is possible to divide or segment Michael J. Saylor's buying strategy by stages
MicroStrategy Stage 1:
One of the great advantages on the part of Saylor's strategy, is that the purchases begin just before a bullish cycle, placing positions that immediately entered the profit zone, being positions with an interesting purchase volume.
I would place this stage between September 14, 2020 and February 2, 2021, where purchases were made from 10k to 33k, with a total expenditure of $1,145,000,000.00 and an average price of $16,108.84 for 71079 Bitcoins, a stage that really represents an impressive profit at the time of writing this article.
MicroStrategy Stage 2:
This stage placed it at the top of the previous bull cycle, where the worst average purchases were made in Michael J. Saylor's strategy. This is a long stage, because the BTC price movement formed a double top and at the time of the retracement a double bottom was formed which made enthusiasts hopeful that a typical shoulder, head and shoulder structure could form in BTC, which caused buying to take place.
Another characteristic of this stage is the buying in short periods of time, as happened with Bukele with the purchases of El Salvador, indicating a possible FOMO not only in ordinary people, but also in large investors, who tried to accumulate in an area that ended up being the top of the upward movement, raising the overall average price of MicroStrategy.
I have plotted this stage to 5 April 2022, as the next purchase is months later at a very different price. In this stage a total of 15 purchases were made, adding to MicroStrategy's BTC holdings some 58139 Bitcoins, spending in total some $3,953,309,559.45 at an average price of $67,997.55 per BTC, this is a stage that undoubtedly drove the overall average price through the roof, however, leaving it at just over 30k until April 5, 2022.
MicroStrategy Stage 3:
Michael J. Saylor's strategy in this third stage, was to lower the average price of purchases made at above the highs of the previous bull cycle. This stage is from June 29, 2024 to the present, when MicroStrategy is in profit in all of its positions.
It is interesting that 3 of all purchases were made at the bottom of the Bitcoin bearish cycle, from 29 June 2022 to 24 December 2022. In fact, MicroStrategy sold 704 Bitcoin, i.e. even large investors, regardless of the reason, can also sell at the bottom of the chart, although this amount is recovered only a couple of days later.
At this stage 63782 Bitcoins were bought, spending $2,155,500,000.00, with an average price of $33,794.80 per BTC. Opening strong positions, but maintaining the average price, bearing in mind that after the 4 purchases I referenced above, MicroStrategy makes new purchases after a significant price rise, a plan with a little more risk, but Michael J. Saylor definitely knows what he is doing.
BTC Position Summary:
MicroStrategy owns 193000 Bitcoins, with a purchase cost of $6,133,700,000.00, at the current price (68k per BTC), the investment is worth $13,159,597,425.20, which is an increase of $7,025,897,425.20, which translates to a growth of 114. 55% for MicroStrategy, which is totally impressive, considering that Michael J. Saylor did a lot of buying at the top of the last bullish period, however, he had the patience to keep buying and using the DCA strategy he was able to achieve a totally profitable average price.
MicroStrategy Shares
As you would expect, the stock reacts to the rise in BTC, in this case, it is in an important area on the chart above the MSTR share price, reaching the area of the 2021 high, however, from a technical point of view, I am very struck by the candle shown on the weekly chart, above the previous week which started on Monday 26th February 2024.
The chart shows an increase in price, but with record weekly volume, which may indicate a continuation of the upward movement for the next few months, of course, it will all depend on the movement of BTC, as both MSTR and BTC stocks are correlated.
TradingView
MicroStrategy will continue to grow and has demonstrated the viability of BTC as an institutional investment, despite enduring bear markets, an important point for traditional investors who have perceived Bitcoin as a bubble asset and worthless in the future, however, Michael J. Saylor has demonstrated the opposite.
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Great job on the article! Your analysis of MicroStrategy's Bitcoin investment strategy is insightful and well-presented. I sincerely enjoyed reading ♥️. Keep up the excellent work!
Thank you very much for your comment, it is valuable for me and motivates me to continue writing this kind of articles.