Michael Saylor swears by bitcoin.
"#Bitcoin is my daily tweet," he just posted to his more than 2 million followers on Twitter.
He is a bitcoin evangelist, staying the course despite the upheavals that bitcoin has experienced since the start of the year. "In bitcoin I believe," could be his motto.
MicroStrategy (MSTR), where Saylor is chairman and chief executive officer, has just made new purchases of bitcoin.
"During the period between February 15, 2022 and April 4, 2022, MicroStrategy, through its wholly-owned subsidiary, MacroStrategy LLC, acquired approximately 4,167 bitcoins for approximately $190.5 million in cash, at an average price of approximately $45,714 per bitcoin, inclusive of fees and expenses," the firm said in a SEC filing.
"As of April 4, 2022, MicroStrategy, together with its subsidiaries, held an aggregate of approximately 129,218 bitcoins, which were acquired at an aggregate purchase price of approximately $3.97 billion and an average purchase price of approximately $30,700 per bitcoin, inclusive of fees and expenses," the company added.
The company says it owns 89% (115,110) of these bitcoins itself.
A Profitable Bet ... for Now
MicroStrategy has already realized a juicy capital gain on this investment, with a bitcoin portfolio worth $5.67 billion at last check, according to Bitcoin Treasuries.
This investment comes at a time when cryptocurrency prices are trying to rebound after some very difficult weeks. Bitcoin is currently trading between $44,000 and $47,000. Prices had fallen to around $32,000 on fears of recession.
While the Russian invasion of Ukraine affected prices, it also made the general public see that digital currencies could be useful in daily life.
The collapse of the Russian and Ukrainian economies and the sanctions imposed on Russia pushed local populations to rely on cryptocurrencies to receive humanitarian aid and to protect the value of their savings.
"The surge in food & fuel prices is going to further weaken global currencies and encourage the imposition of capital controls, price controls, & export controls, favoring a strategy based on digital products, digital services, & digital assets. #Bitcoin," Saylor posted on Twitter this week.
MicroStrategy is one of the very few established companies with so much bitcoin on its balance sheet. The company is followed by electric vehicle manufacturer Tesla (TSLA). Elon Musk's group, another bitcoin champion, owns 43,200 bitcoins, worth $1.896 billion.
Another well-known company holding bitcoin is Jack Dorsey's Block (SQ). The fintech, formerly known as Square, holds 8,027 bitcoin, worth $352,297 million.
Loan to Buy Bitcoin
According to Bitcoin Features, these investments are currently paying off because they are worth more than what the companies initially spent initially.
However, Tesla and Block have not recently bought bitcoins, unlike MicroStrategy.
The latest investments of the firm of Saylor are not a surprise.
MacroStrategy, a subsidiary of MicroStrategy, last month obtained a $205 million term loan collateralized by bitcoin from Silvergate Bank, a subsidiary of Silvergate Capital Corporation (SI), a financial infrastructure service provider.
The loan was collateralized at closing by bitcoin, with a value of approximately $820 million placed in a collateral account held by a custodian mutually authorized by the lender and the borrower.
"Under the terms of the agreement, MacroStrategy will use the loan proceeds to purchase bitcoins, to pay fees, interest, and expenses related to the loan transaction, or for MacroStrategy’s or MicroStrategy’s general corporate purposes," the two companies said at the time.
"[The] loan gives us an opportunity to further our position as the leading public company investor in bitcoin,” said Saylor.
“Using the capital from the loan, we’ve effectively turned our bitcoin into productive collateral, which allows us to further execute against our business strategy.”
