Michael Saylor and the company he co-founded, Strategy (formerly MicroStrategy), have become synonymous with Bitcoin since the company transitioned into a BTC treasury company. Over the years, the company has grown into a leading publicly traded company with the largest BTC holdings worth tens of billions of dollars. Although the entire BTC stack is currently generating big gains, there is a lot of speculation about what will happen if the price of Bitcoin falls to Strategy’s average purchase price.
Bitcoin Holding Analysis of Strategies
Strategy has been buying Bitcoin consistently for the past four years, since Michael Saylor first introduced the idea in 2020. These purchases have so far occurred at intervals, with the amount of BTC purchased varying at various points in Bitcoin’s life cycle, causing the average purchase price to fluctuate over time.
At the time of this writing, Strategy currently holds 641,205 BTC after its most recent purchase on November 3rd. The company purchased 397 BTC at an average price of $114,771 per Bitcoin, for a total cost of approximately $45.6 million. This purchase brings the company’s average purchase price to $74,057 per BTC.
Its total holdings of 641,205 BTC cost it $47.487 billion, but with Bitcoin prices rising over the years, the company is seeing profits of over $18 billion so far. According to data from Bitcoin Treasures, total BTC holdings now stand at $64.91 billion, representing a 36.61% return.
Considering the information above, Strategy’s BTC holdings are maintaining solid returns and it looks like a good move so far. However, with the price of Bitcoin falling below $100,000 this week, there are many questions about what happens if the price of Bitcoin falls to the strategy’s average price.
Some cryptocurrency community members on The Strategy’s BTC holdings cannot be liquidated if the price falls below the average price because it actually owns the BTC it holds.
If the price of Bitcoin falls below $74,000, your holdings will simply suffer a loss. That means the current price is lower than where you bought it. To liquidate its holdings, a company must sell them on the market at any price to repay investors.
However, Saylor has stated in the past that the company has no plans to sell off its significant BTC holdings anytime soon. Despite numerous rumors that the company was selling BTC, Saylor continued to buy it, paving the way for other Bitcoin treasury companies in the space.
Featured image by Dall.E, chart by TradingView.com
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