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Microstrategy Holds 1% of Bitcoins

Microstrategy Holds 1% of Bitcoins

The company, led by Michael Saylor, announced a new Bitcoin purchase. Saylor remains optimistic about Bitcoin.

  • MicroStrategy already has 214,246 bitcoins (BTC) in its treasury.
  • Neither high prices nor declines stop this company’s accumulation of BTC.

The executive wrote on his X account, “MicroStrategy has acquired an additional 9,245 BTC for approximately $623 million using proceeds from convertible notes and excess cash, at approximately $67,382 per bitcoin. As of March 18, 2024, MicroStrategy holds 214,246 BTC acquired for approximately $7.53 billion, at an average price of $35,160 per bitcoin.”

The 214,246 figure takes on special significance. It represents approximately 1% of all the bitcoins that will ever exist: 21 million units. It represents 1.089% of the mined 19,658,462 BTC. In simpler terms, Microstrategy holds 1 out of every 100 bitcoins.

In doing so, the company remains steadfast in its DCA strategy. While some wonder whether to buy BTC with prices “this high,” MicroStrategy answers yes. While some wonder whether to buy BTC when the price falls or wait for it to fall further, MicroStrategy presses the “buy” button. Thus, it has achieved an average price considerably below the current price of BTC, which means it is in profit.

The motivation for accumulating Bitcoin is that Saylor thinks that in the next ten years, the price can rise to unimaginable levels. Therefore, this would be the exact time to accumulate the digital currency. Bitcoin already serves as a medium of exchange and a global store of value. During his most recent participation at LaBitConf, a conference held in Argentina last November, Saylor highlighted the qualities of Bitcoin and explained that it is those qualities that drive him to accumulate as much BTC as possible:

“If we want to preserve our wealth, the investor has to convert his wealth into scarce, desirable, portable, durable, and holdable assets. These are the five essential criteria. They have to evaluate each asset against this.”

Michael Saylor, president of MicroStrategy.

Why is there a 21M cap to Bitcoin?

Scarcity: This is the big one. For instance, Satoshi Nakamoto, who created Bitcoin, aimed to develop a scarce asset like gold by limiting the number of Bitcoins that will ever be produced. The restricted supply should theoretically lead to an increase in price as demand for Bitcoin rises with time. Scarcity is one of the fundamental concepts in economics.

Monetary Policy: This 21 million cap also serves as an in-built monetary policy for Bitcoin. On the other hand, central banks print traditional currencies while design predetermines Bitcoin supply, and you cannot inflate it. The limit aids in maintaining the stability of the currency for a long time.

Moreover, the system halves by two every four years the block rewards given to miners who validate transactions and add new blocks to the blockchain. Consequently, this reduces how fast the system generates new bitcoins through time. Around 2140 the miner community would mine all 21 million Bitcoins. They will only get transaction fees to keep securing the network after the event. Some people argue whether the 21 million cap can ever be changed though it is written into the Bitcoin protocol. A major change could theoretically be implemented if there’s enough consensus between users and miners.

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