MicroStrategy once again holds more bitcoin than BlackRock’s IBIT — for now

MicroStrategy now holds 205,000 bitcoin after revealing the latest addition to its stockpile amid a crypto price rally. 

The total is slightly more bitcoin than what BlackRock’s spot bitcoin ETF held, as of market close on Friday.

The largest publicly traded holder of bitcoin (BTC) said Monday it used proceeds from convertible notes as well as excess cash to buy 12,000 more bitcoins for about $820 million.

The buy comes a week after MicroStrategy said it intended to utilize a $600 million private offering of convertible notes to do just that. The unsecured senior obligations of MicroStrategy were set to bear interest payable semi-annually, beginning on Sept. 15, 2024. 

Read more: Will MicroStrategy ever stop buying bitcoin?

The business intelligence firm’s announcement came on a day during which bitcoin reached another all-time high price of more than $72,000.

BTC’s price was at about $72,600 at 2:30 pm ET — bringing the value of MicroStrategy’s bitcoin to about $14.9 billion. That value is more than double the roughly $6.9 billion the BTC stockpile was purchased for.

While MicroStrategy’s most recent stack of BTC was purchased at an average price of $68,477, the average price per bitcoin of its 205,000 BTC stands at about $33,700. 

MicroStrategy founder Michael Saylor called bitcoin “digital property” that “is going to eat gold” during a Monday interview with CNBC. 

“The killer application is capital preservation for everybody,” he added. “The store of value is the killer use case.”

Read more: Bitcoin is DeFi’s future

The latest rise in price is validating — for now — a bitcoin buy-and-hold strategy that Saylor’s firm has held in all market conditions.  

“We’re buying it to hold it [for] 100 years; so that being the case, that $66,000 to $16,000 crash shook out the tourists [and] shook out the non-believers,” the executive told CNBC. “We were all ready to ride it to zero…Now we’re riding it the other direction.”

MicroStrategy stock versus ETFs

MicroStrategy’s stock was up about 12.5% on the day at 2:30 pm ET. It is up about 123% from a month ago — outpacing BTC’s price rise of about 50% over that span.

Historically a proxy for bitcoin, MicroStrategy stock now competes with the spot bitcoin ETFs that the Securities and Exchange Commission approved in January.  

Analysts have noted, however, that shareholders of MicroStrategy don’t pay a management fee. Stockholders can also benefit from the company’s use of leverage, while also getting downside protection, some industry watchers argue.

Read more: Is MicroStrategy stock better than a spot bitcoin ETF?

The 205,000 BTC MicroStrategy holds is slightly more than the nearly 198,000 BTC held by BlackRock’s iShares Bitcoin Trust (IBIT) at market close Friday, according to BitMEX Research data. 

IBIT’s assets under management stood at about $13.6 billion on Friday — roughly half of the assets within the Grayscale Bitcoin Trust ETF (GBTC). The latter fund ported over $28 billion when converting to an ETF in January and remains the biggest fund in the category.  

While MicroStrategy previously functioned primarily as a software business, Saylor said it has rebranded to a “bitcoin development company.”

“Certainly the substantial amount of our enterprise value is based on our unique ability to issue securities and to purchase bitcoin with convertible debt, with equity and the like,” Saylor said Monday. “The only reason we could make this transition was because the software business was healthy.”

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