MicroStrategy Buys $5.4B Bitcoin as Galaxy Warns

MicroStrategy recently expanded its position as the largest corporate holder of Bitcoin by purchasing approximately $5.4 billion worth of the cryptocurrency [1]. This acquisition brings the company's total holdings to around 386,700 bitcoins, valued at roughly $37 billion at current prices [1]. While the topic suggests a specific timeline for MicroStrategy to overtake Satoshi Nakamoto's holdings, the provided sources do not contain information regarding such a timeline or Galaxy Research's specific projections on that matter.

Key takeaways

• MicroStrategy acquired 55,500 bitcoins for $5.4 billion between Nov. 18 and Nov. 24 [1].
• The company now holds 386,700 bitcoins, making it the largest corporate holder of the asset [1].
• Galaxy Digital CEO Mike Novogratz warned of a sharper correction in bitcoin-related stocks than in the cryptocurrency itself [1].
• MicroStrategy shares fell nearly 9% before recovering some losses, though the stock is up over 500% year-to-date [1].

MicroStrategy's $5.4 Billion Bitcoin Purchase

Between November 18 and November 24, MicroStrategy purchased approximately 55,500 bitcoins for about $5.4 billion, according to a company filing [1]. This significant acquisition followed a prior purchase of $4.6 billion worth of bitcoin the week before [1]. To finance these recent purchases, the company utilized proceeds from the sale of convertible bonds and new stock [1]. The buying spree has occurred as the cryptocurrency trades near the $100,000 mark, though it was priced just above $95,000 on Monday morning [1]. MicroStrategy, originally a business software provider, has been accumulating bitcoin since August 2020 and intensified its acquisitions this year, particularly following the U.S. presidential election on November 5, as investors bet on a crypto-friendly administration [1].

Galaxy Digital Warns of Stock Correction

Despite the increased holdings, MicroStrategy's stock experienced volatility, falling as much as nearly 9% on Monday before paring losses to trade down roughly 5% [1]. The stock's performance, which includes a gain of more than 500% year-to-date, has attracted the attention of short-sellers and market analysts [1]. Mike Novogratz, CEO of Galaxy Digital, told CNBC that he expects a sharper correction in bitcoin-related stocks such as MicroStrategy than in the cryptocurrency itself [1]. Additionally, short-seller Citron Research opened a short position in the stock as a hedge, characterizing the shares as "overheated" even while maintaining a bullish long-term view [1].

Why it matters

MicroStrategy's aggressive accumulation strategy highlights the growing intersection of corporate finance and digital assets, particularly in a political climate perceived as supportive of the crypto industry [1]. However, the divergence between the company's stock performance and the underlying