MicroStrategy Buys $616 Million of Bitcoin, Stock Jumps 8%

Software firm MicroStrategy said on Wednesday it had bought bitcoin worth about $615.7 million in cash, amid growing expectations that the top U.S. markets regulator will soon approve a spot bitcoin exchange traded fund (ETF).

MicroStrategy (NASDAQ:MSTR) said on Wednesday it had bought bitcoin (CRYPTO:BTC) worth about $615.7 million in cash, as the company looks to benefit from the growing anticipation of a U.S. markets regulator approval for a spot bitcoin exchange traded fund (ETF).

The company and its subsidiaries purchased about 14,620 bitcoins at an average price of roughly $42,110 between Nov. 30 and Dec. 26, according to a regulatory filing.

Shares of the Virginia-based company rose 8% in afternoon trading. MicroStrategy shares have surged over 350% this year, while bitcoin has gained nearly 160%.

MicroStrategy's move to buy bitcoin to protect the value of its reserve assets has helped strengthen the appeal of the firm's stock, which tends to move in tandem with the digital asset.

“This is not a short-term trading strategy but rather reflects a belief that bitcoin will ultimately prove a superior store of value,” analysts at TD Cowen said.

“The company remains an attractive vehicle for investors looking to gain bitcoin exposure,” the brokerage added.

In recent months, a spate of filings, including from traditional finance heavyweights like BlackRock (NYSE:BLK), have revived the crypto markets which had been crushed after several high-profile firms such as Sam Bankman-Fried's FTX collapsed.

A spot crypto ETF would track the market price of the underlying crypto asset, giving investors exposure to the token without having to buy the currency.

MicroStrategy, which began buying the cryptocurrency in 2020, said it together with subsidiaries now holds about 189,150 bitcoins bought for about $5.9 billion.

The company has said its bitcoin investments are intended as long-term holdings and that it expects to continue to accumulate the world's biggest and best-known cryptocurrency.

“Due to its limited supply, bitcoin offers the opportunity for appreciation in value if its adoption increases and has the potential to serve as a hedge against inflation in the long-term,” the company said in its latest quarterly report.