MicroStrategy has become the most important company which is adopting the Bitcoin these days. It is the only publicly listed firm to buy Bitcoin as a reserve asset to store their capital in.
Their report last month announcing their decision to ditch the USD in favor of Bitcoin to store their capital was very important for crypto world, as it showed that the benchmark digital asset is gaining utility as a store of value.
For a company with million dollars in cash, the decision makes sense, as the crypto’s scarcity enables them to avoid the losses that could be happened due to inflation.
Acquiring this much Bitcoin without going through over the counter (OTC) venues is not easy, however, and the company’s CEO explained in a tweet how they went about doing this.
MicroStrategy holds 38,250 Bitcoin
Earlier this week, Microstrategy CEO Michael Saylor announced that his company had doubled down on their Bitcoin bet, adding $175m worth of the crypto to their holdings.
This significant purchase came about weeks after the firm had revealed its plans to switch to an alternative Bitcoin-focused financial strategy. They now want to hold their entire capital reserves in BTC to avoid inflation and devaluation of the USD, which is being printed at unprecedented rates.
This strategy is unprecedented and was kicked off by buying a whopping $250m worth of the crypto.
The company revealed on September 15th that they were purchasing even more of that, conducting a $175 million purchase via the spot retail markets. This may have caused Bitcoin’s price to rally to $10,900 while the rest of the market were going down.
Their total holdings now stack up to 38,250 Bitcoin, with an aggregated purchase price of $425 million.
Here’s how MicroStrategy market-bought 16,796 BTC
During their latest bout of purchasing, MicroStrategy used the retail market to gain their crypto, with the company’s CEO explaining that they purchased 16,796 BTC throughout 74 hours of continuous trading.
“To acquire 16,796 BTC (disclosed 9/14/20), we traded continuously 74 hours, executing 88,617 trades ~0.19 BTC each 3 seconds. ~$39,414 in BTC per minute, but at all times we were ready to purchase $30-50 million in a few seconds if we got lucky with a 1-2% downward spike.”
The massive amount of capital that was introduced into the market due to these 74 hours of trading likely had lasting impacts that may still be influencing Bitcoin.