MicroStrategy CEO Michael Saylor has revealed that he personally holds 17,732 bitcoins purchased at an average price of $9,882, currently valued at approximately $238 million. Meanwhile, the company's bitcoin treasury has yielded $100 million in unrealized gains within just two months, exceeding its cumulative operating profits over the past three and a half years.
Personal Holdings: Cost Basis and Scale
In a Twitter post, Saylor stated that he informed MicroStrategy's board of his personal bitcoin stash before the company decided to adopt bitcoin as its primary Treasury reserve asset. His average entry price of $9,882 per BTC contrasts with the company's average purchase price of $11,111. At the time of the report in late October 2020, the bitcoin price stood at $13,447.85, making Saylor's personal holding worth over $238 million.
MicroStrategy itself holds 38,250 BTC acquired at an aggregate cost of $425 million. At $13,447.85, the company position is worth more than $514 million, reflecting a paper gain of about $89 million. Saylor has repeatedly indicated that the company plans to hold its bitcoin for 100 years, signaling a long-term commitment rather than a trading strategy.
Bitcoin Profits vs. Core Business Earnings
Independent analyst Kevin Rooke highlighted that MicroStrategy earned $78 million from its business operations over the 3.5 years leading up to the bitcoin purchases, while its bitcoin holdings generated $100 million in unrealized gains in just two months. This stark comparison underscores how the cryptocurrency allocation has dwarfed the company's traditional software business returns.
The company's share price also benefited from the bitcoin strategy, rising nearly 38% from $117.81 on July 28, 2020, to $162.15 at the time of writing. Investors appear to be pricing in the bitcoin stash as a significant asset on the balance sheet.
From Skeptic to Evangelist
Saylor's journey with bitcoin is notable for his dramatic change of heart. In December 2013, he famously tweeted that 'Bitcoin's days are numbered' and predicted it would 'suffer the same fate as online gambling.' However, after deep research into monetary economics, he concluded that bitcoin is the best store of value, far superior to gold or tech stocks.
Since adopting bitcoin, Saylor has become one of the most vocal proponents in the corporate world. He regularly publishes long-form analyses and advises other CEOs to allocate a portion of their treasury reserves to bitcoin, providing detailed financial modeling. His personal investment aligns with his public advocacy, adding credibility to his stance.
Impact and Legacy
MicroStrategy's bold move paved the way for other major corporations such as Tesla, Square, and later others to add bitcoin to their balance sheets. The success of Saylor's strategy triggered a wave of discussions among CFOs about treasury diversification and inflation hedging.
Although the bitcoin price is highly volatile, Saylor believes that in an environment of unprecedented money printing and negative real yields, asymmetric assets like bitcoin offer superior long-term risk-adjusted returns. His personal holding of 17,732 BTC at an average cost below $10,000 remains one of the highest-profile individual bitcoin positions ever disclosed by a public company CEO.
As of publication, Bitcoin trades at $13,447, and MicroStrategy continues to hold its positions without any disclosed sales. The company's subsequent quarterly reports would show further bitcoin purchases, solidifying its reputation as the de facto corporate bitcoin treasury.