MicroStrategy Bet on Bitcoin! Purchased US$17.5 billion in 6 weeks, then spent another US$1.5 billio

summary： MicroStrategy Bet on Bitcoin! Purchased US$17.5 billion in 6 weeks, then spent another US$...

MicroStrategy Bet on Bitcoin! Purchased US$17.5 billion in 6 weeks, then spent another US$1.5 billion to increase the position

Here’s the translation of your article into English with proper grammar and readability:

MicroStrategy’s Major Bitcoin Acquisition: Strategic Insights, Funding Flow, and Market Impact

MicroStrategy has once again become a key focus in the Bitcoin market. According to a filing submitted to the U.S. Securities and Exchange Commission (SEC) on December 18, 2023, MicroStrategy purchased 15,350 additional Bitcoin between December 9 and December 15, investing a total of $1.5 billion at an average price of approximately $100,386 per Bitcoin. This move further solidifies the company’s position as the largest corporate holder of Bitcoin globally, drawing significant attention from the market.

MicroStrategy’s Funding Sources and Acquisition Strategy

The funds for this Bitcoin purchase primarily came from stock sales. MicroStrategy successfully sold over 3.88 million shares, raising $1.5 billion. This action is part of the company’s plan to raise up to $42 billion over the next three years through stock and bond issuances, aimed at continuing its Bitcoin accumulation strategy.

As of December 15, 2023, MicroStrategy holds a total of 439,000 Bitcoin, accounting for approximately 2.1% of the total Bitcoin supply of 21 million. The total value of these holdings exceeds $45 billion. According to Michael Saylor, co-founder and executive chairman of MicroStrategy, the average purchase price per Bitcoin was about $61,725, with a total investment of $27.1 billion, including transaction fees.

A Six-Week Buying Spree: Market Reaction and Controversies

Over the past six weeks, MicroStrategy has continued its aggressive Bitcoin purchases, spending a total of $17.5 billion, which accounts for 39% of the company’s current Bitcoin holdings. For example:

• Between December 2 and December 8, MicroStrategy acquired 21,550 Bitcoin at an average price of $98,783, investing approximately $2.1 billion.

• The week prior, the company spent $1.5 billion to purchase Bitcoin.

This aggressive investment strategy has polarized market reactions. Supporters argue that it reflects a strategic long-term holding approach and sees potential for Bitcoin’s appreciation. However, some investors are cautious, concerned about the company’s reliance on stock and bond issuances, fearing excessive leverage and associated risks.

Institutional Perspectives: Ample Leverage Space for MicroStrategy

According to analysis from leading financial firm Bernstein, MicroStrategy’s Bitcoin strategy still has room for expansion. The firm highlights:

• Reasonable Leverage Ratio: MicroStrategy’s convertible bonds account for just 18% of its Bitcoin net worth, leaving ample room for further growth.

• Valuation Rationalization: As MicroStrategy continues to hold more Bitcoin, its market value premium will gradually normalize, attracting more investors.

• Bitcoin Price Range: If Bitcoin remains around $100,000, MicroStrategy is expected to maintain its accumulation pace.

Joining the Nasdaq 100 Index: Impact of Fund Inflows

Notably, MicroStrategy will officially join the Nasdaq 100 Index on December 23, 2023, becoming the 40th largest constituent stock, with a weight of approximately 0.47%. This move has significant implications:

• ETF Inflows: Index funds like QQQ and others are expected to buy MicroStrategy shares, bringing in at least $21 billion, according to Bloomberg analyst James Seyffart.

• Enhanced Market Value and Liquidity: Being part of an index helps MicroStrategy boost its market value and liquidity, creating a "capital flywheel" effect where the company can continue issuing shares to fund Bitcoin purchases.

MicroStrategy’s Long-Term Strategy: Targeting $1 Million Bitcoin

Michael Saylor has consistently emphasized that MicroStrategy’s core strategy is "long-term Bitcoin holding," viewing Bitcoin as a global asset superior to gold. While some market opinions argue this strategy is too risky, supporters believe that if Bitcoin reaches $1 million, MicroStrategy’s returns will be highly lucrative.

With the new accounting rules for cryptocurrencies from the Financial Accounting Standards Board (FASB), MicroStrategy and other firms will now be able to report unrealized gains and losses directly in financial statements, enhancing transparency and valuation. This positions MicroStrategy more competitively for potential inclusion in the S&P 500 Index in the future.

Market Outlook: Potential S&P 500 Inclusion

Although MicroStrategy’s core software business has yet to meet the profitability standards for inclusion in the S&P 500 Index, the adoption of new accounting rules and continued Bitcoin accumulation could lead to a turnaround in its financial performance. With expectations of Bitcoin prices continuing to rise, MicroStrategy may accelerate its path toward inclusion in the S&P 500.

How Investors Should View MicroStrategy’s Future Impact

While MicroStrategy’s strategy carries higher risks, it reflects strong confidence in Bitcoin as a "digital gold." For investors, understanding the following points is crucial:

• Leverage Risks: MicroStrategy’s reliance on stock and convertible bond issuance to fund Bitcoin purchases requires close monitoring.

• Market Value Fluctuations: The company’s stock price remains highly sensitive to Bitcoin price movements, so investors need high-risk tolerance.

• Long-Term Potential: If Bitcoin reaches $100,000 or even $1 million, MicroStrategy’s strategy could deliver substantial success.

Keywords: Bitcoin accumulation, MicroStrategy, Nasdaq 100, Michael Saylor, cryptocurrency investment.