Key Takeaways:
- MicroStrategy goes for a fresh scoop of Bitcoin
- MSTR's dependency on BTC leaves the former open to the digital asset's volatility
- Experts forecast a 30% profit for MSTR holders by the nd of the year
YEREVAN (CoinChapter.com) – Business intelligence firm MicroStrategy has acquired another batch of Bitcoin (4,167 BTC) worth over $190 million. The company accumulated the said amount between Feb. 15 and Apr. 4, according to an Apr. 5 regulatory filing.
MicroStrategy goes $4B deep in Bitcoin
After the latest purchase, the firm owns 129,218 BTC, acquired for approximately $4 billion at an average price of $30,700 per Bitcoin, since adopting the flagship cryptocurrency as its primary treasury reserve asset in April 2020. The company’s CEO Michael Saylor tweeted the news and got mixed replies, ranging from “Bravo” to accusations of defeating Bitcoin’s purpose.
These maxi whales are just creating a new version of what we already have… a disparity of wealth where very few own 99% of it all and people pray to retire at 95 on 0.5btc
read one of the replies.
Moreover, as CoinChapter previously reported, his firm’s subsidiary MacroStrategy closed a $205 million Bitcoin-collateralized loan from Silvergate, the “first blockchain bank.” In other words, the company borrowed Bitcoin to buy more Bitcoin.
Also read: MacroStrategy signs a Bitcoin-collateralized loan with Silvergate for $205M as MSTR hits $520.
MicroStrategy did not issue Bitcoin-denominated bonds to finance the purchases. Saylor recently said in an interview that the cryptocurrency market was “unprepared” for such a product. Hence, he resorted to a more conventional bank loan.
However, the company’s stock MSTR remained in a sideways consolidation and traded at $487 per share.
MSTR and BTC
MSTR’s week-long consolidation came after trading at $520 a share, a 10-week high for the tech stock. Notably, MSTR erased most of its year-to-date losses, maintaining the upside impulse for the previous two weeks.
Also read: MicroStrategy comes back for more Bitcoin—MSTR drops 5.40%.
In detail, since implementing the heavy Bitcoin purchase strategy, MSTR became susceptible to the digital asset’s price volatility, as the chart below illustrates.
However, experts predict a nearly 30% price appreciation for MSTR in 2022, despite the Q4 losses. Others estimate MSTR’s earnings per share (EPS) to stand at $6.64 in 2022, and $6.16 in 2023, with the lowest EPS forecast at $5.20 and the highest at $7.12.
Also read: Strong Bitcoin accumulation underway — BTC on-chain data shows.
Furthermore, according to Nasdaq, four Wall Street analysts have issued a 12-month price target for MSTR in the previous three months. As a result, the company has a Strong Buy consensus rating based on three Buys, one Hold, and zero Sell ratings.
Cross-market globalization is of remarkable help to MicroStrategy and other operators’ growth plans, as it creates endless opportunities through rapid expansion in the enterprise software segment.
added Nasdaq analyst.
