- MicroStrategy now holds 125,051 bitcoins, which it acquired for nearly $3.8 billion
- As banks become more involved in the cryptocurrency space, there will be more opportunities to use companies to acquire bitcoin, says MicroStrategy CEO Michael Saylor
MicroStrategy is looking to continue buying and holding bitcoin as executives say the firm's options for using bitcoin to seek leverage, revenue or strategic partnership opportunities will increase as the asset class continues to mature.
The Virginia-based analytics and business intelligence firm is the owner of the world's largest publicly traded bitcoin company.
MicroStrategy now owns 125,051 bitcoins, which it acquired for nearly $3.8 billion – at an average price of $30,200. Executives said on the company's earnings call Tuesday that it has about 110,000 bitcoins that are not pledged as collateral and could be used to generate revenue or leverage.
"In a world where Goldman Sachs, Morgan Stanley, Merrill Lynch, Bank of America, Citigroup and JPMorgan Chase are all interested and involved in this space, I think there will be more options available to us and less risk that we have to take on the counterparty side," said CEO Michael Seiler.
MicroStrategy purchased 10,300 bitcoins in the fourth quarter at an average price of $57,113. The acquisition comes after raising funds through the company's market share offering.
The company revealed in a filing Tuesday that it purchased an additional 660 bitcoins for about $25 million in cash between Dec. 30 and Jan. 31, which equates to $37,865 per bitcoin.
MicroStrategy plans to continue to use free cash flow to buy more bitcoin and will continue to evaluate opportunities to raise additional capital as a way to purchase digital assets, Seiler said.
Saylor spent a few minutes on the earnings call touting the opportunity to invest in his company's stock. He argued that MicroStrategy doesn't have the capital obligations or competitive uncertainty that bitcoin miners have.
Seiler added that MicroStrategy has advantages over ETFs based on bitcoin futures and pointed out the cost of rolling over futures contracts.
He explained that even a spot bitcoin ETF, which has not yet been approved by the SEC, would cost between 50 and 100 basis points.
Some industry watchers say they don't expect spot bitcoin ETFs to hit the market until at least 2023. The number of blockchain and cryptocurrency-related ETFs continues to grow as issuers await approval, with many of them holding MicroStrategy .
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