MicroStrategy keeps buying Bitcoin, but analysts remain skeptical

CEO Michael Saylor tweeted that his company purchased an additional 480 bitcoins for roughly $10m at an average price of $20,817 per coin, adding more to its 130k BTC reserve.

The business intelligence and software firm is known for being the public company with the largest Bitcoin reserves. MicroStrategy holds nearly 130,000 BTC bought at an average price of $30,664 for $4b. The second biggest Bitcoin holder is Tesla with 42,902 BTC ($862m).

As Bitcoin is trading below $20k at the time of writing, MicroStrategy remains $1.4b underwater on Bitcoin despite averaging down. Edward Moya, a senior market analyst for foreign exchange company OANDA, told Blockworks that the company clearly decided to bet all on Bitcoin and seeks to deploy more capital to buy the dip.

“The rapid appreciation before last year’s record high and latest demise shows MicroStrategy has failed to capitalize on the way up and to find protection when things got ugly,” Moya said. “Investors looking for crypto exposure should not consider MicroStrategy a good vehicle for that as they have proven to be reckless with their portfolio management.”

Peter Schiff, known for backing gold over Bitcoin, didn’t miss a chance to make snide comments on Saylor’s Bitcoin maximalism. The economist pointed out that MicroStrategy’s latest buy is too small relative to its overall BTC reserves to make a significant change, plus there's no confidence that the bottom was already reached.

MicroStrategy’s stock price has dropped about 68% since the beginning of the year. Recently, the company faced the threat of a margin call on its $205m bitcoin-backed loan taken from Silvergate Bank. Michael Saylor, however, assured investors that MicroStrategy has enough capital to pledge additional collateral.