Earlier this week, the Executive Chairman of Strategy (formerly MicroStrategy), Michael Saylor, announced that the company had made another major Bitcoin purchase. The announcement, which was made on Monday, showed that despite the bearish market headwinds, the company has not given up on its Bitcoin strategy. Following the announcement, though, a community member known as Lindsay on X pointed out an interesting fact about Strategy’s massive BTC holdings and the asset’s price movements.
Strategy Makes Bank Every time Bitcoin Moves $1,000
Strategy’s latest Bitcoin purchase of 3,015 BTC, despite being worth $204.1 million at the time of its purchase, now looks like a tiny blip on its over 700,000 BTC holdings. At the time of the last purchase, the company now holds 720,737 BTC, maintaining its position as the public company with the largest BTC holdings in the world.
Amid this revelation, Lindsay’s post pointed to the fact that Strategy was actually making a lot of money each time the Bitcoin price moved. For example, every time the Bitcoin price moved upward by $1,000, the company’s position would add a whopping $720 million.
What this means is that the company is in a position where even a small recovery could mean a massive profit margin for the company. However, the reverse is also the case, because if the Bitcoin price drops $1,000, then the company loses $720 million on its BTC holdings.
Another interesting fact about the company’s holdings is that its latest purchase was made at an average price of $67,700 for 3,015 BTC. As a result, the average price of the company’s total BTC holdings has now moved to $75,985 per BTC.
With the Bitcoin price trading below $74,000, it means that the company is currently underwater on its BTC investment. The company has spent $54.77 billion to buy 720,737 BTC, starting in 2020. But presently, the entire stack is worth around $52.49 billion, representing an over 4% loss on its holdings, according to data from Bitcoin Treasuries.
The company’s stock has not been spared from the onslaught as it is down 14.77% year-to-date, falling in line with the 24% BTC price decline during this time period. Saylor also announced that the company’s STRC dividend rate has now been increased from 11.25% in February to 11.50% in March, as the company makes plans to switch from using common stock to preferred share issuance for its Bitcoin purchases.
Featured image from Dall.E, chart from TradingView.com
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