Earlier this week, the chief executive of Strategy (formerly MicroStrategy), Michael Saylor, announced that the company had made another major Bitcoin purchase. The announcement, made on Monday, showed that despite the market’s headwinds, the company has not given up on its Bitcoin strategy. However, after the announcement, a community member named Lindsay on X pointed out an interesting fact about BTC Strategy’s massive holdings and asset price movements.
The strategy makes the 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 purchase, now looks like a small bump in holdings of over 700,000 BTC. At the time of the latest purchase, the company now holds 720,737 BTC, maintaining its position as the public company with the largest BTC holdings in the world.
In the wake of this revelation, Lindsay’s post indicated that the Strategy was actually making a lot of money every time the price of Bitcoin moved. For example, every time the price of Bitcoin rose by $1,000, the company’s position added $720 million.
What this means is that the company is in a position where even a small recovery can generate huge profits for the company. However, the opposite is also the case, because if the price of Bitcoin drops by $1,000, then the company will lose $720 million worth of BTC.
Another interesting fact about the company’s shares is that its last 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 assets has now moved to $75,985 per BTC.
With the price of Bitcoin trading below $74,000, this means that the company is currently under water on its BTC investment. Since 2020, the company has spent $54.77 billion to buy 720,737 BTC. But at the moment, the entire stack is worth about $52.49 billion, which represents a loss of more than 4% of its assets, according to Bitcoin Treasuries.
The company’s stock did not survive the attack, as it is down 14.77% year-to-date, coinciding with a 24% drop in the price of BTC over the period. Saylor also announced that the company’s STRC dividend rate has now increased from 11.25% in February to 11.50% in March as the company plans to switch from using common stock to issuing preferred stock to buy Bitcoin.
Featured image from Dall.E, chart from TradingView.com
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