Michael Saylor and the company he co-founded, Strategy (formerly MicroStrategy), became synonymous with Bitcoin after the company transformed into a BTC treasury company. Over the years, the company has grown into the leading public company with the largest BTC holdings worth tens of billions of dollars. Although the entire Bitcoin group is now making significant profits, speculation abounds about what happens if the price of Bitcoin drops to the strategy’s average buy price.
Analysis of the strategy’s Bitcoin holdings
The strategy has been steadily buying Bitcoin over the past four years Michael Saylor The idea was first presented in 2020. These purchases have occurred over time periods with varying amounts of Bitcoin purchased at different points in Bitcoin’s life cycle thus far, causing the average purchase price to fluctuate over time.
At the time of writing, Strategy currently owns 641,205 BTC after its last purchase on November 3. And the company had Bought 397 Bitcoin At an average price of US$114,771 per Bitcoin, for a total cost of approximately US$45.6 million. This purchase brought the company’s average purchase price to $74,057 per Bitcoin.
Its total holdings of 641,205 Bitcoins cost $47.487 billion, but with the price of Bitcoin rising over the years, the company is seeing profits of over $18 billion to date. according to Data From Bitcoin Treasures, the entire BTC holding is now worth $64.91 billion, which translates to a 36.61% gain.
Given the above information, Strategy’s BTC holdings remain in a solid profitable state and seems like a good move so far. However, with the price of Bitcoin falling below $100,000 this week, questions abound about what would happen if the price of Bitcoin dropped to the strategy’s average price.
Some members of the cryptocurrency community on X (formerly Twitter) have forecast This means that the entire holding will be liquidated, but this is not the case. The strategy’s BTC holdings It cannot be liquidated due to the price falling below its average price because it already owns the bitcoins it holds.
If the price of Bitcoin falls below $74,000, the property will simply suffer a loss, i.e. the price is now lower than where it was purchased. For the property to be liquidated, the company would have to sell it on the market, regardless of price, in order to repay investors.
However, Saylor has said in the past that the company has no plans to sell its significant Bitcoin holdings anytime soon. Despite numerous rumors that the company was selling its bitcoin, which Saylor debunked, it instead continued to buy, paving the way for other bitcoin treasury companies in the space.
Featured image from Dall.E, chart from TradingView.com
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