- Strategy announced on Monday its purchase of 525 Bitcoin for $60.2 million.
- The company now has 638,985 BTC in its treasury, controlling over 3% of Bitcoin’s 21 million fixed supply.
Strategy (formerly MicroStrategy) proceeded with another huge Bitcoin (BTC) purchase announcement today after its executive chairman, Michael Saylor, hinted at it in a cryptic post yesterday. On Sunday, Saylor posted, “Bitcoin Deserves Credit.” Additionally, this went with the usual update on their company’s BTC purchase history under the Strategy Tracker website.
Strategy Increases Haul to 638,985 Bitcoin
This Monday, Strategy went ahead and revealed its acquisition of 525 BTC for $60.2 million. The amount translates to an average of $114,562 per BTC.
The business intelligence firm pulled the trigger on the purchases between September 8 and 14 as Bitcoin fluctuated between a $110K and a $116K high. It funded the transactions using the net proceeds of its series A perpetual strife (STRF), strike (STRK), and stride (STRD) preferred stocks sale on the same period at $68.2 million. The company still has over $46.57 billion worth of shares left for future accumulations.
The latest development increases Strategy’s holdings to 638,985 BTC, controlling more than 3.04% of Bitcoin’s 21 million fixed supply. So far, the business has already invested $47.23 billion for its BTC stockpile at a dollar cost average (DCA) of $73,913 per BTC.
BTC Yield Improves to 25.9% YTD
Strategy’s recent acquisition also boosts its BTC yield to 25.9% year to date (YTD). BTC yield is a key performance indicator (KPI) that the company popularized, which reflects how its Bitcoin-centric treasury scheme is performing relative to its shareholder value. It measures the percentage change in the ratio of its Bitcoin holdings to its assumed diluted shares outstanding.
For an institution focusing its business on Bitcoin, BTC yield answers the question, “Is the amount of Bitcoin per share of the company stock increasing?”
With that, as a Bitcoin development company, Strategy must always ensure that its newly acquired Bitcoin outweighs the dilution from the new shares. A consistent rise in this metric illustrates that the company is effectively using its capital to raise the amount of Bitcoin backing each share, which indicates that its strategy is beneficial for long-term investors.
Again, Strategy’s announcement catalyzed mixed feedback ranging from optimism to FUD. However, one comment that stood out was about why the market tends to crash whenever the company announces its BTC purchases.
One reason is a “Sell the News” event triggering at every update. Saylor’s cryptic posts often create a buzz and lead to speculative buying in the days leading up to the official announcement. When the news finally drops, those who bought in anticipation of a price surge may engage in “profit-taking,” leading to a temporary sell-off.
Furthermore, it should be noted that Strategy typically employs Over-the-Counter (OTC) desks for its bulk purchases. Hence, these private off-exchange transactions allow for the execution of large-volume trades without significantly impacting the market price. The transactions are negotiated directly between the buyer and a large-scale seller (or broker), ensuring a fixed price is agreed upon before the parties execute the transaction. Any resulting price movement in this scenario is a matter of market sentiment, not a direct result of the buy order hitting the order books.
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