Saylor Signals $2.9B Bitcoin Buy as Strategy Faces 10% Portfolio Loss

Quick overview

Michael Saylor – yet again – dropped a hint that Strategy will be adding to its Bitcoin stash, even as the latest market downturn is leaving the firm with a somewhat sizeable unrealized loss of 10%. In a social media post that reads “The Orange March Continues”, he shared a chart showing the company’s cumulative Bitcoin purchases since the year 2020 which has been widely seen as a fairly clear signal that the firm is still buying.

Strategy has already splashed out a whacking $2.9 billion on Bitcoin this month alone. We’re talking $17,994 on the 9th of March and then a further $22,337 on the 16th – both of which are pretty sizeable purchases which is reinforcing its position as the company that owns the most Bitcoin. The value of the firm’s total Bitcoin investment is now sitting at $52 billion, highlighting a long term conviction in this cryptocurrency despite the short term ups and downs.

Market Pressures Test Strategies Long Term Bet

The price of Bitcoin dropped by about 4% over the weekend, briefly hitting $67,725 before bouncing right back up to $68,100. And in doing so, it placed Strategy’s average purchase price at $75,696 – far above current market levels – which in turn has left the firm with a 10% paper loss.

You can add to the pressure of all this the macroeconomic uncertainty that is hanging over the whole market. With rising tensions between the US and Iran – and worries about the state of the global energy market – it is no wonder people are getting a little anxious about the stability of pretty much everything – including Bitcoin. So, how are key financial indicators looking for Strategy?

• Their total Bitcoin holdings are valued at approximately $52 billion
• Their average purchase price is sitting at $75,696 per Bitcoin
• In the month just gone, they acquired an astonishing $2.9 billion in Bitcoin
• And currently, their unrealized loss is running at over 10%

Despite all these numbers, Saylor has stuck to this line that Bitcoin is a long term store of value. And he’s done this by focusing on accumulation over trying to predict the market.

Funding Challenges – and the Impact on the Stock

Now we all know that Strategy has been financing its aggressive Bitcoin buying strategy through a series of high-yield preferred stock offerings, such as STRC. These have allowed them to raise the funds they need without having to dilute the common shareholders – and they also offer regular dividends to the investors who have put in the cash.

However, recently Strategy paused on this funding route when they failed to secure the extra capital they needed, which has left all sorts of questions about the sustainability of their acquisition pace. And at the same time, the firm’s stock (MSTR) has been getting increasingly volatile, dropping to $135.66 last week – a 6.6% fall – and well down from its all time high of $434.20.

Not so long ago, the stock was a standout performer – but now it’s dropped nearly 69% in the past two years, and it’s a reflection of a lot of the broader skepticism that’s out there about the corporate crypto treasury models. As fewer and fewer companies are going down this route, Strategy’s approach stands out – but it’s also getting a lot of scrutiny in a shifting market landscape.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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