MicroStrategy doubles down on Bitcoin, promises to keep accumulating BTC despite ZyCrypto market volatility

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Economic intelligence firm MicroStrategy has pledged to continue buying Bitcoin, despite the sharp fluctuation in cryptocurrency prices lately.

The claim was made by Phong Le, CEO of MicroStrategy, when announcing the company’s first quarter financial results on Monday.

As you all know, our strategy is to acquire and hold bitcoin, and we plan to continue to accumulate bitcoin over time using our excess cash and with net proceeds from capital markets transactions, said The during the earnings call, noting that Microstrategys’ core business is not impacted by short-term fluctuations in the price of Bitcoin.

We remain committed to our Bitcoin acquisition strategy with a high degree of conviction, he added.

MicroStrategy took a long-term view and risk management approach to its Bitcoin strategy. Since 2020, the company has continued to buy Bitcoin, with the latest foray being 1045 Bitcoin early last month. Microstrategy currently holds 140,000 Bitcoins with a total cost of $4.2 billion or an average of around $29,800 per Bitcoin. This makes MicroStrategy the largest publicly traded bitcoin holding company in the world.

Le also reassured investors about the company’s financial health, noting that it repaid its $205 million Bitcoin-backed loan from Silvergate last year at a 22% discount. In March, MicroStrategy disclosed in a U.S. Securities and Exchange Commission filing that it had used part of the proceeds from a $339.4 million public sale of its stock to repay the loan.

According to Le, after the repayment, MicroStrategy recovered 34,619 bitcoins that served as collateral for the loan, which is now free of any encumbrances. As of March 31, 2023, only 11% of MicroStrategys’ total bitcoin holdings were pledged as collateral for debt.

MicroStrategys’ decision to invest heavily in Bitcoin has been controversial, with some investors expressing concerns about the volatility of cryptocurrencies. However, Michael Saylor, now the company’s executive chairman, remained bullish on Bitcoin, saying it’s 100% better than gold. He also argued that Bitcoin is an inflation hedge and a safe haven asset during times of economic uncertainty.

That said, although MicroStrategys’ Bitcoin reserve has been in the red for about a year, its bold investment has paid off recently, with the holdings increasing in value as the price of cryptocurrencies has risen in recent months. According to Saylor Tracker, a service that tracks MicroStrategys Bitcoin purchases, the value of companies’ Bitcoin stash is currently at a loss of $203 million. That said, it remains to be seen if Bitcoin prices can rise for these holdings to turn green or if the cryptocurrency will continue to dive.

At press time, BTC was trading at $28,762, up 2.08% over the past seven days, according to data from CoinMarketCap. The largest cryptocurrency by market cap traded mostly flat on Tuesday, gaining just 0.53% in the past 24 hours.

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