Micro Strategy Purchases Another 7,002 Bitcoin: Why Can't They Stop Buying?
According to a filing Micro Strategy submitted to the U.S. Securities and Exchange Commission (SEC) this Monday, the company purchased 7,002 Bitcoin in October and November, spending $414 million, with an average price of $59,187 per Bitcoin. After completing this "purchase," Micro Strategy's total Bitcoin holdings now exceed 120,000.
According to statistics from OKG Onchain Master, as of December 3, 2021, Micro Strategy held a total of 121,000 Bitcoin , with a total value of $6.841 billion (calculated at real-time value at the time of writing), a total cost of $3.6 billion, an average cost of approximately $29,500 per Bitcoin, current unrealized profit of $3.241 billion, and a return rate of 90%.
Company Bitcoin Holdings (partial), Data source: OKG Onchain Master
Among all companies holding Bitcoin positions, whether in terms of holding quantity or holding value, Micro Strategy ranks firmly in third place. However, if we look only at the ranking among publicly traded companies, Micro Strategy surpasses the holdings of multiple well-known publicly traded companies including Tesla, Galaxy Digital Holdings, Voyager Digital LTD, Square, Inc, and Coinbase Global, Inc., strongly taking the top spot, even exceeding the sum of all holdings of the publicly traded companies that follow it.
"Shadow Stock": Micro Strategy's Indissoluble Bond with Bitcoin
Although most investors in the crypto market have known about Micro Strategy for only a year or two, Micro Strategy's development history actually spans over 30 years. In November 1989, Micro Strategy was founded in Tysons Corner, Virginia, USA, as an enterprise providing business intelligence, data analytics, mobile software development, and cloud computing services. In the 30 years after its founding, Micro Strategy consistently focused on its core business, with no reports of any intersection with crypto assets. In fact, the company's CEO Michael Saylor even criticized Bitcoin on social media in 2013, saying Bitcoin's days were numbered.
Michael Saylor's skepticism about Bitcoin in 2013, image source: internet
However, with the arrival of the crypto market bull run in 2020 and the increasing uncertainty of the global economic environment, Michael Saylor and Micro Strategy under his leadership ultimately couldn't escape the "inevitable attraction." By August 11, 2020, Micro Strategy suddenly announced the purchase of $250 million worth of Bitcoin, thus becoming the world's first publicly traded company to publicly allocate Bitcoin as a treasury asset. To this, Micro Strategy gave the following reasons: US dollar depreciation, declining cash returns, and the impact of macro environments such as the COVID-19 pandemic prompted the company to seek more diversified asset allocation strategies. Looking back at historical market trends, we can find that Bitcoin's price at that time was only around $11,000, which from a later perspective can be described as a perfectly timed bottom-fishing.
Soon after Micro Strategy announced the purchase of its first batch of Bitcoin, Bitcoin began a significant upward trend, rising from around $11,000 in August 2020 to a high of $64,846.9 on April 14, 2021 (according to OKX platform market data), but then began a 5-month volatile downward trend. During this period, Micro Strategy continuously increased its Bitcoin holdings.
As of the Nasdaq close on December 2, 2021, Micro Strategy's total market capitalization was $7.08 billion, while the value of its Bitcoin holdings was $6.841 billion, meaning the total value of its Bitcoin holdings reached 96.62% of the company's total market capitalization, an increase of nearly 25 percentage points from the 71.76% share in June this year. Such a high proportion means that Bitcoin's rise and fall will directly impact Micro Strategy's stock price, and its trend is closely related to the ups and downs of the crypto market. For this reason, Micro Strategy's stock has also earned the title of Bitcoin "shadow stock."
Multiple Debt Financings to Increase Bitcoin Holdings
Micro Strategy's record of borrowing to purchase Bitcoin is not uncommon. As early as December 11, 2020 and February 19, 2021, Micro Strategy successively issued two rounds of notes, raising a total of $1.7 billion in funds, and invested all the raised funds in Bitcoin. Most notably, Micro Strategy cleverly used the financial instrument of "convertible notes" in these two debt issuances to obtain funds from the traditional market at a cost that could almost be ignored, and then used them to bet on the highly volatile Bitcoin. From current results, Micro Strategy clearly bet in the right direction.
On December 11, 2020, Micro Strategy announced the completion of $650 million in senior unsecured convertible notes issuance. According to Business Wire, the annual interest rate on these convertible notes was 0.750%, with interest payments once every six months starting June 15, 2021, meaning interest would be paid on June 15 and December 15 each year. The notes were initially planned to raise $400 million, but ultimately exceeded the fundraising target to reach $650 million, which to some extent reflected the capital market's attitude toward the digital assets industry at that time. It is understood that these notes mature on December 15, 2025, after which investors can choose to convert the notes into cash, Micro Strategy's Class A common stock, or a combination of both. The agreed initial conversion ratio was 2.5126 shares of Micro Strategy Class A stock per $1,000 of principal, meaning investors purchased shares at $397.99. Calculated based on Micro Strategy's closing price of $289.45 on December 8, 2020, this represented a premium of approximately 37.50%. However, if calculated based on Micro Strategy's latest closing price of $683.36, the current unrealized profit of Micro Strategy's creditors from this financing has already exceeded 130%.
On February 19, 2021, Micro Strategy again completed the issuance of $1.05 billion in senior unsecured convertible notes, with a maturity date of February 15, 2027. These convertible notes similarly allow investors to choose to convert them into cash, Micro Strategy Class A stock, or a combination of both upon maturity.
The initial conversion rate for these convertible notes was 0.6981 shares of Micro Strategy Class A stock per $1,000 of notes, equivalent to an initial conversion price of $1,432.46 per share, representing a premium of approximately 50.00% compared to the closing price of $955.00 on February 16, 2021. Besides the premium rate showing investor enthusiasm for this financing round, the interest paid on Micro Strategy's convertible notes is also worth noting. The previous round was 0.750%, while this round was directly zero-coupon (0% annual interest rate), only requiring repayment of principal at maturity. Strictly speaking, this isn't even a conventional zero-coupon note, as zero-coupon notes are typically issued at a discount, while Micro Strategy issued at par value. For these two debts totaling $1.7 billion, Micro Strategy only needs to bear $24.375 million in interest. From the unrealized profit situation of Micro Strategy's current Bitcoin holdings mentioned earlier, although less than a year has passed since completing the first financing, the paper returns are already more than ten times the interest it should pay. Moreover, considering the impact of the "shadow stock," the rise in Bitcoin prices over the past two months has not only allowed Micro Strategy to make a significant profit in the crypto market, but also caused its stock price to rise. Compared to the low price in June this year, Micro Strategy's stock price has now gained a 48.16% increase.
Micro Strategy's most recent financing to purchase Bitcoin occurred on June 7 this year. In a report submitted to the U.S. Securities and Exchange Commission (SEC), Micro Strategy mentioned that the company expected an impairment loss of at least $284.5 million in Bitcoin investments in the second quarter. But immediately after, it announced the issuance of $400 million (later increased to $500 million) in senior secured notes to purchase Bitcoin, with an annual interest rate of 6.125%, maturing in 2028. However, as the entire crypto market was still immersed in the panic sentiment following the May 19 decline at that time, the capital market's optimistic view of this news was clearly less than the previous two financings.
Opponents believe Micro Strategy's Bitcoin position has become too large, to the point where it can even be viewed as the company's core business. If Bitcoin prices continue to decline, this aggressive accumulation method could lead Micro Strategy into insolvency. Once it reaches that point, its massive Bitcoin holdings could become a bomb随时 thrown into the market. Citibank even downgraded Micro Strategy to sell after it first claimed it would issue convertible bonds to purchase Bitcoin, while HSBC prohibited clients from buying Micro Strategy stock. However, fortunately, Micro Strategy bet in the right direction again.
Michael Saylor's evaluation of Bitcoin, information source: hope.com
Micro Strategy CEO Michael Saylor has long since changed his negative view on Bitcoin. On the promotional website he operates, the following is prominently displayed on the homepage: "Bitcoin is like a bank in cyberspace, operating through fair and credible rules, providing a global, affordable, simple, and secure savings account for billions of people who have no choice or don't want to run their own hedge funds." — Michael Saylor.
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This article may contain product-related content not applicable to your region. This article is intended only to provide general information and does not take responsibility for any factual errors or omissions contained therein. This article represents only the author's personal views and does not represent OKX's views. This article is not intended to provide any advice, including but not limited to: (i) investment advice or investment recommendations; (ii) offers or solicitations to buy, sell or hold digital assets; or (iii) financial, accounting, legal or tax advice. Holding digital assets (including stablecoins) involves high risk, may fluctuate significantly, and may even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. For questions about your specific situation, please consult your legal/tax/investment professional. The information appearing in this article (including market data and statistics, if any) is for general reference only. Although we have taken all reasonable precautions in preparing these data and charts, we accept no responsibility for any factual errors or omissions expressed herein. © 2025 OKX. This article may be reproduced or distributed in full, or excerpts of 100 words or less from this article may be used, provided such use is non-commercial. Any reproduction or distribution of the entire article must also prominently state: "This article is copyrighted © 2025 OKX, used with permission." Permitted excerpts must cite the article title and include the source, for example "Article Title, [Author Name (if applicable)], © 2025 OKX". Some content may be generated or assisted by artificial intelligence (AI) tools. Derivative works or other uses of this article are not permitted.
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