Bitcoin enterprise-level investor Strategy (formerly MicroStrategy) is making another significant move. According to the 8-K document submitted to the U.S. Securities and Exchange Commission (SEC) on Monday, Strategy invested $960 million to acquire 10,624 Bitcoins between December 1 and 7, with an average price of approximately $90,615.
This latest purchase has pushed Strategy's Bitcoin holdings to 660,624 coins, valued at approximately $60 billion, with a total investment cost of about $49.4 billion (including fees and related costs), and an average acquisition cost of $74,696 per Bitcoin.
So far, Strategy's paper profit (floating profit) from holding bitcoins is about 10.6 billion dollars, holding over 3% of the total bitcoin supply (21 million coins).
The source of funds for this round of buying comes from Strategy selling 5,127,684 shares of MSTR (Class A common stock) through the 'At Market Issuance (ATM)' mechanism last week, raising approximately 928 million dollars, with over 13.4 billion dollars remaining in the issuance limit; additionally, 442,536 shares of Stride preferred stock (STRD) were sold, raising nearly 34.9 million dollars, with a remaining limit of 4.1 billion dollars.
Last week, Strategy increased its holdings by approximately 11.7 million dollars (average price 89,960 dollars) by purchasing 130 bitcoins, while also announcing the establishment of a cash reserve worth 1.44 billion dollars, specifically for paying preferred stock dividends and debt interest.
Bitwise Chief Investment Officer Matt Hougan analyzed that this cash reserve is sufficient 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 repay debts'.
CryptoQuant research director Julio Moreno believes that the purpose of Strategy establishing a large cash reserve may be to prepare for a potential bear market. He predicts that bitcoin may drop to the range of 70,000 to 55,000 dollars next year.
In response, Strategy's Executive Chairman Michael Saylor has shown great confidence. He pointed out in an interview earlier this year that even if bitcoin prices fall 90% in the future and remain flat for 4 to 5 years, Strategy's capital structure will still be able to support operations.
He admitted that in such extreme circumstances, shareholders may suffer losses, but with flexible allocations of equity, convertible bonds, and preferred stock, the company's finances are sound and controllable.
"Strategy invests an additional 960 million dollars to buy! Holding 660,000 bitcoins, floating profit of 10.6 billion dollars" This article was first published on (Blockke).
