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MicroStrategy remains bullish on Bitcoin, purchases $147.3 million worth

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(Kitco News) - MicroStrategy continues to be bullish on the long-term prospects of Bitcoin (BTC) as the software developer and business intelligence firm co-founded by Michael Saylor announced that it purchased another 5,445 BTC to add to its Treasury, making it one of the largest single holders of Bitcoin in the world.

According to a Monday post from Saylor, MicroStrategy acquired the new stash of BTC for $147.3 million in cash at an average price of $27,053 per BTC. A Form 8-K filing with the Securities and Exchange Commission (SEC) shows that the firm acquired the Bitcoin between August 1 and September 24.

The company said it issued and sold a total of 403,362 MSTR shares to fund the purchase. In August, MicroStrategy said it planned to raise up to $750 million by selling more stock, and intended to use some of the proceeds to buy more Bitcoin.

With the new purchase, MicroStrategy and its subsidiaries now hold “an aggregate of approximately 158,245 Bitcoins, which were acquired at an aggregate purchase price of approximately $4.68 billion and an average purchase price of approximately $29,582 per Bitcoin, inclusive of fees and expenses,” the filing said.

MicroStrategy previously bought 12,333 BTC in June for $347 million at an average price of $29,668 per coin.

Saylor has been one of the staunchest supporters of Bitcoin in recent years, especially when it comes to advocating for companies to hold the top crypto in their Treasuries as a way to hedge against inflation and the depreciation of fiat currencies like the U.S. dollar.

In his pinned tweet on X (formerly Twitter), Saylor says, “Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy.”

Big banks will all own Bitcoin, everyone will sell gold to buy BTC - Michael Saylor

While the crypto community has touted MicroStrategy and Saylor’s Bitcoin support and purchases, the fact that the firm is currently underwater in its investment is a sign to many that the asset class remains too volatile for companies to hold a significant portion of their treasuries.

The firm made its first Bitcoin purchase on August 11, 2020, when it acquired 21,454 BTC for $250 million. This was the first time that a publicly traded company had invested in Bitcoin as part of its treasury reserve strategy.

Despite the low purchase price for that first tranche, MicroStrategy did as many crypto investors do and continued to buy as the price climbed to its all-time high near $69,000 in November 2021, and now find themselves in the red as their average purchase price of approximately $29,582 is below the current BTC price of $26,110.

While the firm has been underwater on its Bitcoin investment for more than a year, conditions improved in the first quarter of 2023 when MicroStrategy reported its first profitable quarter since 2020. The company said that it profited from a one-time income tax benefit; it managed to extend that profitability in Q2, with an August report showing the firm saw a net income of $22.2 million in the quarter.

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