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Technology company MicroStrategy has spent almost half a billion dollars on bitcoin, even as the market continues to collapse.
Michael Saylor, MicroStrategy’s founder and chief executive, said that it had spent $489 million in cash on its 13,005 new bitcoins. It now holds 105,085 bitcoins, worth about $3.3 billion at current prices.
The new bitcoins were bought at an average price of around $37,617, Mr Saylor said in a tweet. The same announcement was made in a post to MicroStrategy’s investors, on its website.
At the same time, Mr Saylor posted a tweet that seemed to urge bitcoin holders to keep their belief even as the price fell.
“Beginning is easy, continuing is hard.” -Japanese proverb on #Bitcoin
— Michael Saylor (@michael_saylor) June 21, 2021
MicroStrategy is a software firm that makes intelligence and analytics software for businesses. But, like Tesla, it has recently also become famous because of the large amount of bitcoin the company holds, and its chief executive’s promotion of crypto.
Mr Saylor continued to promote the technology even as bitcoin’s price fell on Monday, apparently amid fears over new Chinese regulation.
The price was down almost 5 per cent on Monday afternoon, after continuing to fall throughout the day.
In the hours after the announcement, the value of MicroStrategy’s new investment continued to fall. At the time of publication, just a couple of hours after Mr Saylor’s tweet, the price had dropped to under $33,000, down almost 13 per cent on MicroStrategy’s purchase price.
That represents a loss of more than $60 million on MicroStrategy’s investment.
Mr Saylor has publicly said that MicroStrategy is buying its cryptocurrency with a view to the long-term. In February, when the company spent $1 billion on bitcoin, he said that the company believed it to be “a dependable store of value”.
“We will continue to pursue our strategy of acquiring bitcoin with excess cash and we may from time to time, subject to market conditions, issue debt or equity securities... with the objective of using the proceeds to purchase additional bitcoin,” he said.
At the same time, he predicted that bitcoin’s overall value would eventually reach $100 trillion. After Monday’s falls, it currently stands at around $600 billion.