In a bold move that cements its position as one of the largest corporate holders of bitcoin, MicroStrategy has once again increased its already substantial bitcoin holdings. The business intelligence firm acquired an additional 15,350 BTC, bringing its total holdings to a staggering 439,000 BTC, worth approximately $45.6 billion at current market prices.
The latest purchase, which was completed on December 15th, came at an average price of $100,386 per bitcoin, for a total cost of $1.5 billion. This acquisition was funded through share sales under MicroStrategy’s at-the-market (ATM) program, which still has $7.65 billion remaining after the purchase.
A Strategic Move Following Nasdaq 100 Inclusion
MicroStrategy’s bitcoin accumulation comes hot on the heels of the company’s inclusion in the prestigious Nasdaq 100 index, which is set to take effect on December 23rd. The timing of this purchase is no coincidence, as it demonstrates the firm’s unwavering commitment to its bitcoin strategy, even as it gains recognition from mainstream financial markets.
The company’s Executive Chairman, Michael Saylor, has been a vocal advocate for bitcoin, often using social media to hint at upcoming purchases. In the five weeks leading up to this latest acquisition, MicroStrategy had already purchased a total of 171,430 BTC for $15.61 billion, as part of its well-known “21/21 plan”.
Fair Value Accounting for Bitcoin
Another significant development that may have influenced MicroStrategy’s decision to increase its bitcoin holdings is the Financial Accounting Standards Board’s (FASB) recent adoption of fair value accounting for digital assets. This new standard, which will apply to fiscal years after December 15, 2024, allows companies to recognize both fair value gains and impairments on their bitcoin holdings in net income.
Under the previous rules, companies could only record impairments if the value of their digital assets dropped below the purchase price, but they were not allowed to record any gains if the value increased. With fair value accounting, MicroStrategy and other companies holding significant amounts of bitcoin will be able to more accurately reflect the value of their holdings in their financial statements.
Market Reaction and Bitcoin’s All-Time High
News of MicroStrategy’s bitcoin purchase and its inclusion in the Nasdaq 100 has been well-received by the market, with the company’s share price rising 4% in pre-market trading to $425. Meanwhile, bitcoin itself has been on a tear, recently setting a new all-time high above $106,000.
The cryptocurrency’s rally has been fueled by a combination of factors, including increasing institutional adoption, the anticipation of fair value accounting standards, and a general shift in sentiment as more investors view bitcoin as a legitimate asset class.
Other Companies Following Suit
MicroStrategy is not the only company betting big on bitcoin. Semler Scientific, a medical technology company, recently acquired 211 BTC for $421.5 million at an average price of $101,890 per bitcoin. As of December 12th, Semler Scientific holds a total of 2,084 BTC.
The company also filed a second prospectus supplement to its S-3 Shelf, increasing its ATM offering by an additional $50 million, bringing the total offering to $150 million. This move suggests that Semler Scientific, like MicroStrategy, is bullish on bitcoin’s long-term prospects and is positioning itself to benefit from the cryptocurrency’s potential price appreciation.
As more companies adopt bitcoin as a reserve asset and the regulatory environment becomes clearer, it is likely that we will see an increasing number of firms following in the footsteps of MicroStrategy and Semler Scientific. This trend could further drive the mainstream adoption of cryptocurrencies and contribute to the growing legitimacy of bitcoin as an investment vehicle.
With MicroStrategy leading the charge and bitcoin reaching new heights, the stage is set for an exciting future in the world of corporate cryptocurrency adoption. As the market continues to evolve and mature, it will be fascinating to see how other companies navigate this new landscape and position themselves to benefit from the rise of digital assets.
The company’s Executive Chairman, Michael Saylor, has been a vocal advocate for bitcoin, often using social media to hint at upcoming purchases. In the five weeks leading up to this latest acquisition, MicroStrategy had already purchased a total of 171,430 BTC for $15.61 billion, as part of its well-known “21/21 plan”.
Fair Value Accounting for Bitcoin
Another significant development that may have influenced MicroStrategy’s decision to increase its bitcoin holdings is the Financial Accounting Standards Board’s (FASB) recent adoption of fair value accounting for digital assets. This new standard, which will apply to fiscal years after December 15, 2024, allows companies to recognize both fair value gains and impairments on their bitcoin holdings in net income.
Under the previous rules, companies could only record impairments if the value of their digital assets dropped below the purchase price, but they were not allowed to record any gains if the value increased. With fair value accounting, MicroStrategy and other companies holding significant amounts of bitcoin will be able to more accurately reflect the value of their holdings in their financial statements.
Market Reaction and Bitcoin’s All-Time High
News of MicroStrategy’s bitcoin purchase and its inclusion in the Nasdaq 100 has been well-received by the market, with the company’s share price rising 4% in pre-market trading to $425. Meanwhile, bitcoin itself has been on a tear, recently setting a new all-time high above $106,000.
The cryptocurrency’s rally has been fueled by a combination of factors, including increasing institutional adoption, the anticipation of fair value accounting standards, and a general shift in sentiment as more investors view bitcoin as a legitimate asset class.
Other Companies Following Suit
MicroStrategy is not the only company betting big on bitcoin. Semler Scientific, a medical technology company, recently acquired 211 BTC for $421.5 million at an average price of $101,890 per bitcoin. As of December 12th, Semler Scientific holds a total of 2,084 BTC.
The company also filed a second prospectus supplement to its S-3 Shelf, increasing its ATM offering by an additional $50 million, bringing the total offering to $150 million. This move suggests that Semler Scientific, like MicroStrategy, is bullish on bitcoin’s long-term prospects and is positioning itself to benefit from the cryptocurrency’s potential price appreciation.
As more companies adopt bitcoin as a reserve asset and the regulatory environment becomes clearer, it is likely that we will see an increasing number of firms following in the footsteps of MicroStrategy and Semler Scientific. This trend could further drive the mainstream adoption of cryptocurrencies and contribute to the growing legitimacy of bitcoin as an investment vehicle.
With MicroStrategy leading the charge and bitcoin reaching new heights, the stage is set for an exciting future in the world of corporate cryptocurrency adoption. As the market continues to evolve and mature, it will be fascinating to see how other companies navigate this new landscape and position themselves to benefit from the rise of digital assets.
