Saylor Signals More Bitcoin Buys Following Tracker Update

Key Takeaways:

• Michael Saylor hints at continued Bitcoin acquisitions after posting Microstrategy’s Bitcoin tracker for the 10th consecutive time.
• MicroStrategy holds 447,470 BTC, valued at $42.4 billion, following their latest acquisition of 1,070 BTC.
• Critics raise concerns over MicroStrategy’s heavy reliance on debt and Bitcoin’s historical price volatility.

MicroStrategy’s Bitcoin-centric strategy shows no signs of slowing down. 

Founder Michael Saylor reaffirmed continued acquisitions despite market fluctuations. With 447,470 BTC currently in its treasury, valued at approximately $42.4 billion, MicroStrategy has cemented its position as the largest public Bitcoin holder. 

Related: Michael Saylor Urges Microsoft to Adopt Bitcoin, Predicts $5 Trillion Market Cap Boost

However, this bold strategy has sparked significant debate about its sustainability, particularly given Bitcoin’s volatility and MicroStrategy’s reliance on debt financing.

MicroStrategy’s Bitcoin Strategy, Increasing Holdings, and The 21/21 Financing

According to an X post on January 12, MicroStrategy’s portfolio tracking chart, which marks Bitcoin acquisitions with green dots and the market price action with blue, shows signs of a missing addition for the tenth consecutive week. 

MicroStrategy has positioned Bitcoin as its primary corporate asset, acquiring 1,070 BTC on January 6 alone. 

Saylor’s philosophy has historically disregarded Bitcoin’s price volatility, with acquisitions even at record highs of $106,648 per Bitcoin.

While Saylor remains optimistic, MicroStrategy’s stock has faced headwinds. It has fallen approximately 40% from its November 2021 peak of $543 per share, reflecting the broader cryptocurrency market downturn.

Despite the current market fluctuation, Microstrategy remains true to its “21/21 plan, unveiled in October 2024 – an ambitious strategy to raise $42 billion through equity offerings and fixed-income securities. 

The plan is exclusively focused on increasing Bitcoin acquisitions.

In line with this strategy, MicroStrategy recently announced its intention to raise an additional $2 billion through a preferred stock offering in the first quarter of 2025, contingent on favorable market conditions. 

MicroStrategy targets up to $2 billion capital raise through public offerings of perpetual preferred stock in the first quarter of 2025. $MSTR https://t.co/x1pbB8ArlH

— Michael Saylor⚡️ (@saylor) January 3, 2025

Proceeds from this offering would serve a dual purpose: funding further Bitcoin purchases and fortifying the company’s balance sheet.

While innovative, this strategy has drawn criticism for its reliance on external financing, which leaves little room for error. 

Analysts have warned that if Bitcoin’s price trajectory deviates from expectations, MicroStrategy could face significant financial strain.

Criticism of MicroStrategy Bitcoin Strategy And Saylor’s $13 Million Bitcoin Prediction

David Krause, emeritus finance professor at Marquette University, has voiced strong concerns about MicroStrategy’s approach. 

In a recent publication, Krause highlighted the risks of such a leveraged approach, noting that a sharp drop in Bitcoin’s price could lead to catastrophic consequences, including the erosion of shareholder equity and potential bankruptcy liquidation.

MicroStrategy’s entire business model in one chart: a reflexive loop that only works if BTC keeps rising.

When this Ponzi loop inevitably implodes, it’ll make FTX, Enron, and Madoff look like ants. pic.twitter.com/AzxJpbR42W

— Jacob King (@JacobKinge) December 18, 2024

Bitcoin’s historical volatility amplifies these concerns. The cryptocurrency has experienced single-day price swings exceeding 10% due to regulatory developments or macroeconomic events. 

Such fluctuations directly impact MicroStrategy’s stock value, given its heavy reliance on Bitcoin as its primary corporate asset. However, Saylor’s optimism for Bitcoin’s future remains undeterred. 

In a September 2024 interview with CNBC’s Squawk Box, he predicted Bitcoin’s price could reach $13 million over the next 21 years.

This forecast is based on Saylor’s belief that Bitcoin will eventually represent 7% of global capital, up from its current 0.1%. 

Achieving this milestone would require a 13,829% increase in Bitcoin’s price from its current level of $93,283, resulting in a market capitalization of $257.26 trillion.