- October 31, 2024
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
MicroStrategy has unveiled a bold three-year plan to raise $42 billion in capital aimed at expanding its Bitcoin holdings significantly, according to an Oct. 30 statement.
Dubbed the “21/21 Plan,” this strategy intends to gather $21 billion from equity and an additional $21 billion through debt, with the funds directed toward increasing the company’s Bitcoin treasury.
MicroStrategy’s President and CEO Phong Le shared insights into the company’s intentions, stating that the firm is focused on increasing shareholders’ value by leveraging the digital transformation of capital. He added:
“As a Bitcoin Treasury Company, we plan to use the additional capital to buy more bitcoin as a treasury reserve asset in a manner that will allow us to achieve higher BTC Yield.”
This strategy marks a significant escalation in the company’s ambitions for Bitcoin. At current prices, MicroStrategy’s $42 billion plan could result in the acquisition of around 580,000 BTC, accounting for 2.7% of the total supply.
With 450 new Bitcoin mined daily and the next halving scheduled for March 2028—roughly 1,243 days away—MicroStrategy’s planned purchases could potentially acquire nearly all new Bitcoin mined during this period.
Moreover, this would translate to a continuous daily buy pressure of $40 million for three years, a factor that could reshape Bitcoin’s supply-demand conditions.
Currently, MicroStrategy owns roughly 1.2% of Bitcoin’s total supply, or 252,220 BTC, with an estimated value of $16 billion. The company’s original investment in Bitcoin totaled $9.9 billion, with an average purchase price of $39,266 per BTC.
So, with its planned $42 billion purchase, the firm would not only quadruple its investment in the top asset but also further solidify its leading position as a Bitcoin-first company.
Bitcoin yield
While MicroStrategy has huge Bitcoin acquisition ambitions, it stated that it was adjusting its BTC yield projection to a range of 6% to 10% for 2025-2027, reflecting a more cautious outlook.
The BTC yield is a critical measure of the company’s success in delivering shareholder value through Bitcoin acquisitions. The Michael Saylor-led firm reported a year-to-date BTC yield of 17.8%.
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