MicroStrategy set to push Bitcoin to new highs after 55,500 BTC acquisition, should investors be concerned?

MicroStrategy revealed on Monday that it made another heavy Bitcoin purchase, acquiring 55,500 BTC for $5.4 billion at an average rate of $97,862 per coin. The aggressive purchases have left investors wondering about the long-term implications of its strategy of issuing debts to buy Bitcoin.

MicroStrategy increases Bitcoin holdings, experts weigh in

Business intelligence firm MicroStrategy has again purchased Bitcoin, making it the third consecutive week of BTC acquisition. The company revealed in a filing to the Securities & Exchange Commission (SEC) on Monday that it acquired 55,500 BTC over the past week for a total of $5.4 billion.

The purchase was made at an average price of $97,862 per Bitcoin, marking the firm's largest purchase to date. This came after it announced a $3 billion debt offering on November 21 with net proceeds of $2.97 billion. The company further sold 5,597,849 shares between November 18 and 24 for nearly $2.5 billion.

MicroStrategy now holds a total of 386,700 Bitcoin, which it acquired for approximately $21.9 billion at an average price of $56,761 per BTC. 

In November alone, the firm purchased $12.2 billion worth of Bitcoin and has achieved a quarter-to-date yield of 35%.

MicroStrategy began its aggressive Bitcoin acquisition strategy in August 2020, when it purchased 21,454 BTC for $250 million. 

This initial move was motivated by CEO Michael Saylor's belief in Bitcoin as a superior store of value compared to cash, particularly in the context of inflation concerns and economic uncertainty.

Since then, the company has radically increased its holdings, culminating in significant purchases throughout 2024.

MicroStrategy also adopted a plan to raise $42 billion over the next three years, which it intends to use in acquiring additional Bitcoin.

With the company's increased Bitcoin purchases through debt offerings, several crypto experts are sharing their views on the long-term implications its strategy could have on the crypto market.

In an exclusive statement to FXStreet, Darren Franceschini, co-founder of Fideum, said that MicroStrategy's approach offers investors a chance to partake in Bitcoin's bullish trends. He further stated that the company is actively shaping the future of finance.

"By embracing Bitcoin at scale, the company is not just hedging against the future—it's actively shaping it," he stated.

Philipp Zentner, CEO of LI.FI also told FXStreet that Saylor's plan for the company holds a positive future for the company and its investors. 

"The strategy does not pose a significant risk to the broader market unless Saylor opts to liquidate his Bitcoin holdings," he said, hinting at the increasing value of Bitcoin being a strong hedge against any risk that MicroStrategy could acquire.

However, James Davies, CEO of Crypto Valley Exchange, noted that MicroStrategy's approach is driving the narrative with a "play on short term gains versus refinancing cost and cheaper hedging." He added that "driving the narrative that gives your own entity value with debt issuance feels very dangerous. So it really is about timing."