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February 12, 2022
Microstrategy bought the recent dip, adding $25 million worth of bitcoin to its stash.
During the period spanning from December 30, 2021, to January 31, 2022, the company bought 660 bitcoin. That translates to 21 bitcoin per day. The average price was $37,865 per coin.
Microstrategy seems committed to buying bitcoin at any price, despite the bearish sentiment that has gripped the crypto markets lately.
Microstrategy has been including losses resulting from bitcoin price fluctuations in its results lately. And the SEC expressed its displeasure with the practice through a letter to the company.
Microstrategy’s reported $36.1 million loss would’ve been a profit of $27.7 million had it not added the bitcoin losses to its business intelligence software profits.
Microstrategy now owns 125,051 bitcoin. The current market value of this stash is $5.5 billion.
The company started buying bitcoin to hedge its cash reserve against inflation. It then went on to raise money by issuing new shares to expand its bitcoin position.
Given the volatility of the cryptocurrency markets, this practice entails significant risks.
In CEO Michael Saylor’s view, bitcoin will be worth more in the future as it gains adoption. Saylor has reaffirmed that Microstrategy views its bitcoin position as a long-term investment and does not plan to sell bitcoin.
Last week, stock exchange house BTIG issued a buy recommendation for Microstrategy stock. BTIG sees a price target of $950, more than 120% higher than the current price of around $430.