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Nidhi Kolhapur
Nidhi Kolhapur
Author
Nidhi is a Certified Digital Marketing Executive and Passionate crypto Journalist covering the world of alternative currencies. She shares the latest and trending news on Cryptocurrency and Blockchain.
- Sep 26, 2023 12:32 UTC
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MicroStrategy’s Bitcoin Investment: Is the DCA Strategy Paying Off?
MicroStrategy's DCA strategy has left them with an average investment cost of ~$29,000 per Bitcoin, which is above the current market price.
The company's financial stability has been impacted by the decline in Bitcoin's value.
MicroStrategy's robust financial position allows them to weather the current storm and plan for the long term.
MicroStrategy, a company known for its substantial Bitcoin investments, is currently facing scrutiny over its Dollar Cost Average (DCA) strategy. This approach has left them with an average investment cost of approximately $29,000 per Bitcoin, a figure that appears alarming when compared to the current Bitcoin value of around $26,265.
Read on to delve into MicroStrategy’s recent investment moves and the challenges posed by the crypto markets.
Michael Saylor’s Announcement
On September 25th, Michael Saylor, the co-founder and executive chairman of MicroStrategy, made a significant announcement on X (formerly Twitter). The company had recently invested $147.3 million in cash to acquire 5,445 BTC, with each Bitcoin purchased at an average price of $27,053.
As of now, MicroStrategy possesses Bitcoin holdings valued at approximately $4.68 billion and holds a total of 158,245 BTC. However, it’s worth noting that on December 22, 2022, the company sold 704 BTC.
Financial Trouble
MicroStrategy’s financial stability has been rattled by the persistent decline in the value of Bitcoin. Recently, Bitcoin encountered a “death cross,” resulting in a 3.6% drop since its monthly high of $27,700.
To counter these challenges, MicroStrategy can employ a strategy known as Dollar Cost Averaging (DCA). This approach involves purchasing more Bitcoin when prices are low, effectively lowering the average cost of their investment over time. By consistently using this method, they may eventually reach a point where financial losses are minimized.
A Snapshot in Time
While it may seem that MicroStrategy’s Bitcoin investment isn’t currently yielding profits, it’s essential to remember that this evaluation is just a momentary snapshot. The company’s robust financial position allows them to plan for the long term, a luxury not always available in the rapidly changing world of cryptocurrencies.
Do you think MicroStrategy’s Bitcoin investment will pay off in the long run? Why or why not?
Yes 
No 
