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In recent years, Micro Strategy Co., Ltd. (NASDAQ:MSTR) and its chairman Michael Saylor have purchased hundreds of thousands of Bitcoins, and their investments have been very successful.
In a February 26th report, MicroStrategy revealed its latest Bitcoin purchases. Between February 15th and 25th, the company purchased an additional 3,000 Bitcoins for $155.4 million. On the day of the announcement, MicroStrategy’s stock price rose 15.86%, marking one of the best one-day performances in the company’s history.
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The latest purchase brings MicroStrategy’s total Bitcoin reserves to 193,000, worth more than $11 billion at current prices. The tokens, which have been purchased continuously over the past few years, were acquired for a cost basis of $31,544, or just under $6.1 billion. This leaves MicroStrategy with nearly $5 billion in unrealized gains on his Bitcoin holdings.
Despite the potential for huge profits from closing and selling positions, MicroStrategy may not intend to sell any time soon. Saylor appeared on Bloomberg TV last week to discuss the company’s experience with Bitcoin and his own views on Bitcoin assets, saying, “There’s no reason to sell the winners and buy the losers.”
Saylor was also asked about his plans to sell Bitcoin in the future, to which he replied, “Bitcoin is my exit strategy.”
MicroStrategy generates about $120 million in revenue each quarter, but has struggled to grow profits. Bitcoin profits are many times higher than the profits the company makes from its business.
Moreover, its Bitcoin holdings are approaching MicroStrategy’s market cap of $14.5 billion. The company’s stock has performed extremely well over the past month, rising more than 80%.
Saylor began buying Bitcoin in 2020 to hedge against the then-high inflation and seek a return on excess cash. This investment went so well that MicroStrategy became one of the world’s largest Bitcoin investors.
MicroStrategy also considers itself to be “the world’s first Bitcoin development company” and is leveraging its “software development capabilities” to develop Bitcoin applications.
Saylor and MicroStrategy are long-term bullish on Bitcoin. As one of the first publicly traded companies to invest heavily in Bitcoin, MicroStrategy could continue to benefit from rising prices, or it could regret not selling its position now. Only time will tell whether Saylor’s big bet on Bitcoin pays off.
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The article MicroStrategy (MSTR) Now At $49 Billion In Realized Bitcoin Profit originally appeared on Benzinga.com
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