Home Latest Insights | News MicroStrategy Announces Decision to Stop Aggressive Bitcoin Acquisition

MicroStrategy Announces Decision to Stop Aggressive Bitcoin Acquisition

MicroStrategy Announces Decision to Stop Aggressive Bitcoin Acquisition

MicroStrategy Inc. has stunned the crypto world by pausing its aggressive Bitcoin acquisition strategy after 12 consecutive weeks of purchases.

The Virginia-based enterprise software company, led by outspoken Bitcoin advocate Michael Saylor, had been on a buying spree since late October, snapping up more than $20 billion worth of Bitcoin and pushing its total holdings to a staggering $44.7 billion—over 2% of all Bitcoin that will ever exist.

The company’s relentless investment had coincided with a historic rally in Bitcoin’s price, fueled in part by U.S. President Donald Trump’s pro-crypto stance and policy shifts favoring digital assets. As MicroStrategy positioned itself as the ultimate corporate Bitcoin proxy, its unwavering commitment to the cryptocurrency inspired confidence among traders and institutional investors during a time of uncertainty for the market.

Register for Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) today for early bird discounts.

Tekedia AI in Business Masterclass opens registrations.

Join Tekedia Capital Syndicate and co-invest in great global startups.

Register to become a better CEO or Director with Tekedia CEO & Director Program.

However, the decision to halt purchases has sparked concerns among crypto enthusiasts and market watchers, who worry about the potential ripple effects on Bitcoin’s price momentum.

Some analysts fear that without MicroStrategy’s continued backing, Bitcoin’s rally could lose steam, particularly as the broader financial industry faces volatility from Trump’s latest trade policies. The president’s move to impose tariffs on major U.S. trading partners triggered a selloff across the cryptocurrency market, with Bitcoin dipping about 1% to $95,920.

MicroStrategy’s approach to capital deployment is also drawing scrutiny. The company has been aggressively raising funds through stock and debt offerings, aiming to secure $42 billion in capital by 2027. Last week, it sold $563 million in perpetual strike preferred stock while continuing its at-the-market stock sales and convertible debt issuances.

Hedge funds have also played a key role in driving demand for MicroStrategy’s securities, leveraging convertible arbitrage strategies that involve buying bonds and short-selling shares to capitalize on price swings.

MicroStrategy’s stock has been on an extraordinary run, surging more than 2,200% since the end of 2022. However, the pause in Bitcoin purchases appeared to spook investors, with shares slipping around 5% to $318.19 on Monday.

In a December interview with Bloomberg Television, Saylor indicated that the company intended to shift its focus towards fixed-income securities in the first quarter of 2025. As MicroStrategy prepares to report earnings on Wednesday, investors and analysts will be keen to see whether it provides further clarity on its long-term strategy.

Benchmark analyst Mark Palmer, who holds a “buy” rating on the stock, noted that the company has been far more aggressive in issuing capital and using the proceeds to buy Bitcoin than initially projected.

“It has been much more aggressive in terms of issuing capital and using the proceeds to buy Bitcoin than had been originally outlined back when the company first talked about this in conjunction with its third quarter earnings call,” said Palmer. “So now the question is, will the company revise that plan one way or the other?”

MicroStrategy did not say whether it plans to resume its weekly purchase of Bitcoin at some time. The company appears to be focusing on the aim to secure $42 billion in capital by 2027.

No posts to display

Post Comment

Please enter your comment!
Please enter your name here