Strategy Just Bought Bitcoin for the First Time in Over Two Months. Here's Why the Timing Matters.
MicroStrategy has resumed purchasing Bitcoin after a brief period of selling, acquiring $370 million worth of the cryptocurrency at a higher price point. The move has sparked debate among investors regarding the company's long-term valuation strategy.
Why it matters
MicroStrategy's aggressive Bitcoin acquisition strategy significantly influences market sentiment and the company's own stock volatility.
Strategy ( MSTR +4.42% ) is back to buying Bitcoin ( BTC -0.62% ) .
On Aug. 31, the firm acquired $370 million of Bitcoin at an average purchase price of $80,318. The purchase came after four straight sales. In combination, these sales brought in roughly $430 million.
On paper, the moves appear confusing. Why dump $430 million in Bitcoin over a period of two months just to buy most of that stake back within weeks of the last sale?
The moves get even more confusing when you consider that Strategy executed its latest purchase at a higher price than its recent sales. Strategy's sales were executed at prices between $59,000 and $64,000 per Bitcoin. The latest purchase, however, was executed at roughly $80,000. The result was more than $80 million in sacrificed shareholder value when accounting for both the higher repurchase price and the foregone opportunity cost.
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