Corporate Bitcoin Strategy Reaches New Milestone
MicroStrategy (formerly known as MicroStrategy), the pioneer of corporate Bitcoin reserve strategies, has acquired an additional 4,020 BTC for approximately $427.1 million**, with an average purchase price of **$106,237 per Bitcoin. This brings their total holdings to 580,250 BTC, acquired at a cumulative cost of $40.61 billion** (average cost: **$69,979/BTC). Year-to-date in 2025, their Bitcoin investments have yielded a 16.8% return.
Funding the Bitcoin Acquisition Spree
To finance this latest purchase, MicroStrategy utilized a three-pronged capital-raising approach:
- Common stock (MSTR): Raised $348.7 million
- 8% Convertible Preferred Stock (STRK): Raised $67.9 million
- 10% Preferred Stock (STRF): Raised $10.4 million
The total $427 million** raised was allocated entirely toward Bitcoin acquisitions. Notably, the company recently signed agreements with three financial institutions to potentially raise **$2.1 billion through STRF issuance.
👉 How institutional investors leverage Bitcoin holdings
Why MicroStrategy’s Stock (MSTR) Outshines Bitcoin
Since adopting its Treasury Reserve Policy in September 2020—a strategy prioritizing Bitcoin as its primary reserve asset—MicroStrategy has:
- Used operational cash flow, debt, and equity financing to accumulate BTC.
- Seen MSTR shares surge 28x, dwarfing Bitcoin’s 8x growth over the same period (see chart below).
This performance underscores MSTR’s role as a leveraged Bitcoin proxy, offering amplified exposure to BTC price movements.
Institutional Arbitrage Opportunities
MicroStrategy’s aggressive Bitcoin accumulation has also made it a target for arbitrage strategies. Prominent short-seller Jim Chanos recently criticized the company’s valuation model on CNBC, calling it "absurd" to justify equity premiums solely based on Bitcoin holdings. He recommended:
- Long Bitcoin + Short MSTR as a paired trade.
👉 Exploring Bitcoin-backed corporate strategies
FAQs About MicroStrategy’s Bitcoin Strategy
Q1: Why does MicroStrategy keep buying Bitcoin?
A: The company views Bitcoin as a superior store of value compared to cash reserves, aiming to hedge against inflation while capitalizing on long-term appreciation.
Q2: How does MicroStrategy fund its Bitcoin purchases?
A: Through a mix of stock issuances (MSTR, STRK, STRF), debt offerings, and operational cash flow.
Q3: Is MSTR stock riskier than holding Bitcoin directly?
A: Yes. MSTR’s price reflects both Bitcoin’s volatility and corporate financial risks (e.g., dilution from share offerings).
Q4: What’s the average cost basis of MicroStrategy’s Bitcoin holdings?
A: **$69,979/BTC** across 580,250 BTC ($40.61 billion total investment).
Q5: Could regulatory changes impact MicroStrategy’s strategy?
A: Potentially. Tax policies or Bitcoin ownership restrictions might affect their treasury management approach.
Risk Disclosure: Cryptocurrency investments carry high volatility and risk of capital loss. Assess your risk tolerance carefully.
Data as of May 25, 2025.