Bitcoin enterprise-level investor Strategy (formerly MicroStrategy) has made another significant move. According to an 8-K filing submitted to the U.S. Securities and Exchange Commission (SEC) on Monday, Strategy invested 960 million USD to purchase 10,624 Bitcoins from December 1 to 7, at an average price of approximately 90,615 USD.
This latest purchase has increased Strategy's Bitcoin holdings to 660,624 coins, valued at approximately 60 billion USD, with a total investment cost of about 49.4 billion USD (including fees and related costs), and an average acquisition cost of 74,696 USD per Bitcoin.
So far, the paper profits (floating profits) of the bitcoins held by Strategy are approximately 10.6 billion USD, owning more than 3% of the total bitcoin supply (21 million coins).
The source of funds for this round of purchases comes from Strategy's sale of 5,127,684 shares of MSTR (Class A common stock) through the 'At-the-Market' (ATM) mechanism last week, raising about 928 million USD, with over 13.4 billion USD remaining in the issuance quota; additionally, 442,536 shares of Stride preferred stock (STRD) were sold, raising nearly 34.9 million USD, with a remaining quota of 4.1 billion USD.
Last week, Strategy increased its holdings by about 11.7 million USD (average price 89,960 USD) by acquiring 130 bitcoins, while also announcing the establishment of a cash reserve worth 1.44 billion USD, specifically for paying preferred stock dividends and debt interest.
Bitwise's Chief Investment Officer Matt Hougan analyzed that this cash reserve is enough to support Strategy's financial needs for more than a year and a half, and the company's first debt will not mature until February 2027, with no pressure to 'sell coins to pay off debts.'
CryptoQuant's Research Director Julio Moreno believes that the purpose of Strategy's establishment of a large cash reserve may be to prepare for a potential bear market. He predicts that bitcoin may fall to the range of 70,000 USD to 55,000 USD next year.
In response, Strategy's Executive Chairman Michael Saylor demonstrated high confidence. In an interview earlier this year, he pointed out that even if the price of bitcoin drops by 90% in the future and remains flat for 4 to 5 years, Strategy's capital structure would still be sufficient to support operations.
He admitted that in extreme scenarios, shareholders may suffer losses, but with the flexible allocation of equity, convertible bonds, and preferred stocks, the company's finances are sound and controllable.
This article is authorized for reprint from: (Block Guest)
Original title: (Strategy invests 960 million USD to increase purchases! Holding 660,000 bitcoins with a floating profit of 10.6 billion USD)
Original author: Block Sister MEL
'Bitcoin tycoons strike again, Strategy invests 960 million to increase BTC holdings, with paper profits exceeding 10 billion USD' this article was first published in 'Crypto City'
