Has Strategy further strengthened its Bitcoin reserve?

Michael Saylor has just reignited speculation about a new bitcoin acquisition from Stratgy. In fact, on October 4, he published the graph which traces the company’s purchases. However, its publication does not represent an official announcement. Only an official press release from the group will confirm a new transaction.

A new bitcoin purchase from Strategy remains to be confirmed

By releasing his graph dotted with orange dots, Michael Saylor clarified: “more orange than ever”. Each point constitutes a purchase of bitcoins already published by Strategy.

Such announcement resembles the messages that preceded the group’s last two acquisitions. It therefore fuels the hypothesis of a new transaction, without providing an amount, period or purchase price.

The latest figures officially available are as follows:

• Strategy owned 847,666 BTC as of September 27;
• Their purchase cost was around $63.95 billion;
• The average price was $75,437 per bitcoin;
• The group had carried out 116 acquisition operations;
• The portfolio value approached $72.29 billion on the shared chart.

At current prices, the unrealized capital gain was close to $8.1 billion. However, this estimate can fluctuate rapidly with the price of bitcoin and does not constitute any realized gains until the assets are sold.

The two previous messages announced purchases

Michael Saylor regularly uses his Sunday publications to prepare the market for official communication. On September 20, he broadcast a first message while the group owned 845,050 BTC.

The next day, the company announced the acquisition of 950 bitcoins for $75.7 million. The average price of this transaction reached $79,670 per unit, which brought Strategy’s reserves to 846,000 BTC.

A week later, the same scenario happened again. On September 27, Saylor wrote “even more orange” by publishing a new version of its chart. The next day, the group confirmed the purchase of 1665 BTC.

This second transaction represented $142.7 million. The bitcoins were acquired between September 21 and 27 at an average price of $85,681, including fees and expenses.

This repetition reflects the expectations triggered by the new message. However, it does not confirm that a purchase has already taken place. The group would also use this announcement to reiterate its cash flow strategy or maintain attention around its action.

Strategy’s bitcoin purchase hinges on its stock offerings

The net proceeds from sales of ordinary shares enabled Strategy to finance its latest purchase. Such a method provides the opportunity for the company to raise capital without immediately using its operational cash flow or immediately taking on new debt.

However, it involves a cost for the group’s shareholders. As soon as the company issues new shares, their shareholding may be diluted. This operation therefore only creates value per share if the evolution of bitcoin and the financing conditions compensate for this dilution.

Strategy now combines several instruments to fuel its reserve. The group can sell ordinary shares, issue preferred securities or use part of its cash. This architecture gradually transforms the company into a financial vehicle exposed to bitcoin.

As of September 27, Michael Saylor’s group also had a reserve of $5.02 billion intended in particular for the payment of preferential dividends and interest on its debt. An additional billion dollars remained available for its treasury operations.

These reserves show that the group does not automatically devote all its resources to purchasing bitcoins. It must also cover its financial obligations and preserve its ability to weather a prolonged market decline.

Strategy now owns more than 4% of bitcoins

With 847,666 BTC, Strategy controls just over 4% of the maximum supply of 21 million bitcoins. The company thus remains, by far, the leading listed holder of crypto.

This concentration gives each new operation a scope that goes beyond its sole balance sheet. Strategy purchases reduce the quantity of bitcoins immediately available on the market, although their direct impact on the price also depends on the daily trading volume.

The average price of $75,437 now constitutes an important benchmark for the group. A lasting fall below this level would reduce the value of its portfolio compared to its historical cost. It could also complicate future fundraising if Strategy stock loses part of its premium relative to its assets.

Conversely, a rise in bitcoin mechanically improves the value of reserves and can facilitate new financing. This mechanism, however, remains dependent on the market and does not guarantee that each issue of securities will benefit shareholders.