In brief
- Strategy purchased roughly 600 Bitcoin last week.
- That marked the company’s 100th Bitcoin purchase to date since it started buying in 2020.
- The company is hosting a conference for Bitcoin-buying firms this week.
Strategy disclosed its smallest Bitcoin purchase of the year on Monday, betting modestly on the digital asset before hosting a two-day conference in Las Vegas.
The Tysons Corner, Virginia-based firm spent $40 million on 591 Bitcoin last week, lifting its total holdings to 717,722 Bitcoin, according to a press release. With Bitcoin recently changing hands around $65,500, the firm’s stockpile was worth $47 billion, CoinGecko data showed.
The event in Las Vegas is billed as a networking event for those shaping “the future of enterprise success.” It’s set to kick off with a keynote address from Strategy co-founder and Executive Chairman Michael Saylor on the company’s shift toward “digital credit.”
The backdrop surrounding Bitcoin-buying firms was far different when the company hosted “Strategy World” for the first time last May, not least because the largest corporate holder of Bitcoin has seen its holdings swing to a massive loss on paper since.
After spending more than $54 billion on Bitcoin, Strategy faces a $6.8 billion unrealized loss. However, its average purchase price ticked down to $76,020 with its latest purchase, which marked the 100th addition to its stockpile since it was formed in 2020.
Strategy’s stock price fell 2.5% on Monday to $127, according to Yahoo Finance. That was above a low of around $123 weeks ago, yet 64% lower over the past six months.
The company’s latest acquisition was funded with proceeds from issuing common shares. Purchases had accelerated in prior weeks as the company leaned on its variable rate preferred stock (STRC), which currently offers 11.25% in monthly dividends.
The product is core to Saylor’s vision for stockpiling Bitcoin amid what some fear will be a prolonged period of weakness in the crypto market. Still, STRC has saddled Strategy with additional monthly costs, leading it to shore up cash to effectively pre-pay dividends.
Traders on Myriad, a prediction market owned by Decrypt’s parent company Dastan, penciled in a 17% chance on Monday that Strategy sells Bitcoin this year. That marked a decrease from 33% earlier this month, when Strategy disclosed a $12.4 billion fourth-quarter loss.
The shift has come as Strategy’s enterprise value has fallen relative to its stock price, making it more difficult for the company to increase the Bitcoin it owns per share as it normally would. The metric known as mNAV, or multiple-to-net asset value, has declined broadly for similar firms.
As a result, Strategy’s Bitcoin purchases are growing more pronounced among the pack. For example, the firm accounted for 93% of Bitcoin added among publicly traded companies in January. It stacked 40,150 Bitcoin during the period compared to 3,080 Bitcoin among its competitors.
Strategy has furthered its lead using STRC, but it isn’t the only Bitcoin-buying firm that issues variable rate preferred shares. The gathering is expected to feature executives from Strive and Metaplanet, which have adopted similar products to buy Bitcoin in recent months.
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