Earlier this week, Chairman of Strategy (formerly MicroStrategy) Michael Saylor announced that the company had made another major Bitcoin purchase. The announcement, made on Monday, showed that the company is not giving up on its Bitcoin strategy despite bearish market headwinds. However, after the announcement, a community member known as Lindsay from X pointed out some interesting facts about Strategy’s huge BTC holdings and the asset’s price fluctuations.
The strategy makes money every time Bitcoin moves $1,000.
Strategy’s latest Bitcoin purchase, 3,015 BTC, was worth $204.1 million at the time of purchase, but it now appears to be a small fraction of its holdings of more than 700,000 BTC. As of the last purchase, the company currently held 720,737 BTC, maintaining its position as the public company with the largest BTC holdings in the world.
Amid this revelation, Lindsey’s post pointed out the fact that Strategy was actually making significant profits every time the price of Bitcoin changed. For example, for every $1,000 increase in the price of Bitcoin, the company’s position would increase by a whopping $720 million.
What this means is that the company is in a position where even a modest recovery could mean huge profit margins. However, the opposite is also true. If the price of Bitcoin drops by $1,000, the company would lose $720 million from its BTC holdings.
Another interesting fact about the company’s stock holdings is that the most recent purchases were made for 3,015 BTC at an average price of $67,700. As a result, the average price of the company’s total BTC holdings has now increased to $75,985 per BTC.
Bitcoin price trading below $74,000 means the company is currently underwater on its BTC investments. The company has spent $54.77 billion purchasing 720,737 BTC since 2020. But now, according to Bitcoin Treasury data, the entire stack is worth about $52.49 billion, representing a loss of more than 4% of its holdings.
The company’s stock price has not been immune to the onslaught, declining 14.77% since the beginning of the year, matching the 24% decline in BTC price during this period. Saylor also announced that the company’s STRC dividend rate has been 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 purchase Bitcoin.
Featured image from Dall.E, chart from TradingView.com
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