MicroStrategy unveils historic investment plan for Bitcoin
The biggest publicly traded institutional Bitcoin holder, MicroStrategy, has shocked the cryptocurrency market with a statement that it will raise an enormous $42 billion over three years to expand its already sizable portfolio.
MicroStrategy CEO Phong Le announced the company's $42 billion fundraising drive, known as the "21/21 Plan," from the company's Tyson, Virginia, headquarters on October 30, 2024. $21 billion in capital increases and $21 billion in fixed income securities make up the strategy's two equal components.
The news was made at a time when the corporation already has a substantial Bitcoin portfolio worth $18.2 billion, consisting of 252,220 units.
Even though MicroStrategy's financial results from the previous quarter were mixed, their approach shows a strong belief in Bitcoin's future. With revenue down 10% to $116.1 million, the corporation recorded a net loss of $340 million, more than twice the $143.4 million loss from the previous year.
According to its leaders, this aggressive approach to Bitcoin accumulation essentially changes the company's identity from that of a software company to that of a "Bitcoin treasury company."
With a current value of $72,209 per unit, the Bitcoin market may be significantly impacted by MicroStrategy's action. The queen of cryptos' status as an institutional store of value is further supported by this extensive investing strategy.
Since making its initial Bitcoin purchases in 2020, the company has established itself as a viable option for institutional investors who want to invest in Bitcoin without using the recently authorised ETFs or conventional exchanges. Because of this special position, many conventional investors now use MSTR shares as a Bitcoin proxy.
The statement comes at a time when Bitcoin is experiencing a bull market, rising 9% in the last seven days, despite MicroStrategy's shares, ironically, dropping 4% to $247.31.
This MicroStrategy approach represents a sea change in the institutionalisation of Bitcoin. All eyes are on the implementation of this ambitious strategy, which has the potential to redefine the standards of institutional Bitcoin investing, as the market processes this significant announcement.