- MicroStrategy plans to purchase $42 billion worth of BTC over the next three years.
- One analyst predicted that MSTR will become more like an American spot BTC ETF.
Michael Saylor’s company, MicroStrategy, announced plans to acquire $42 billion Bitcoin [BTC] over the next three years, just before the 2028 halving cycle.
“Today we are announcing a strategic goal to raise $42 billion in capital over the next three years, consisting of $21 billion in equities and $21 billion in fixed income, what we call our “21/21 Plan.”
This has reinforced Saylor’s very bullish stance on BTC, as he expects the asset to reach $3 million to $49 million in the next twenty years. He has too supported Trump’s pro-crypto stance, with latest attempt to eliminate capital gains tax on BTC.
Does MSTR change to BTC ETF?
As of October 2024, MicroStrategy owned 252,220 BTC, acquired for $9.9 billion. The company’s BTC supply was now worth over $18.15 billion at current prices, translating into $8 billion in unrealized gains.
Source: MicroStrategy
However, part of the company’s $42 BTC acquisition plan will be executed through a $21 billion ATM (at-the-market) stock issuance program, which some analysts believe would change the stock’s MSTR to a BTC ETF.
One of the analysts, Quinn Thompson, founder of the macro-focused crypto hedge fund Lekker Capital, said,
“By ripping off the band-aid and announcing a massive ATM shelf like this, they are turning $MSTR into a de facto ETF.”
This would allow the company to issue shares on the secondary market at any time to fund the acquisition of BTC, similar to the way US spot BTC ETFs work. According to Thomspon, this could boost MSTR even more.
The equity program, in addition to the intention to issue convertible bonds (debt) to purchase BTC, summarizes the company’s long-term vision to become a ‘Bitcoin bank,‘ as revealed in mid-October.
That said, MSTR holders seemed to be the real beneficiaries of the latest update. MSTR has been the best-performing S&P stock since the introduction of the BTC strategy in 2020. This has seen MSTR outperform and could even downplay the company’s last third-quarter loss of $19.4 million.
Year-over-year (YTD), MSTR rose +250%, more than 4x BTC’s gain of 60%. In the third quarter, MSTR rose about 20%, while BTC ended the quarter with a gain of less than 1%.
Source: MSTR vs BTC, TradingView
In short, from an investor returns perspective, it was better to hold MSTR than BTC.
Interestingly, the stock was expected to post an additional 7% rally after its latest earnings report, Bitwise’s head of alpha strategies, Jeff Park, noted. Citing the MSTR options data, Park declared,
“As we enter $MSTR earnings, there is an explosive situation: Nov 1 Vol is ~115%, implying a 7.2% move.”
At the time of writing, MSTR was valued at $247, and it remains to be determined whether it will set a new annual record as Park predicted amid BTC’s tight consolidation above $72K.