MicroStrategy Makes Historic Bitcoin Purchase

MicroStrategy Makes Historic Bitcoin Purchase, Nation State FOMO Instensifies

November 24, 2024 · By Andrew Throuvalas

Beaver Bullets:

• MicroStrategy achieved a historic milestone by purchasing 51,780 BTC for $4.6 billion, marking the largest Bitcoin purchase in history.

• Pennsylvania has introduced new legislation to establish a state-level Bitcoin reserve

• Donald Trump appointed Bitcoin advocate Howard Lutnick as Commerce Secretary

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1.  MicroStrategy announced a purchase of 51,780 BTC for $4.6 billion on Monday – the single largest Bitcoin purchase in history.

Several months ago, we wrote about how the government of Germany was steadily selling its BTC, which was frightening the market and driving the price down.

At the time, we told you not to panic. This was a week’s long process to sell 50,000 BTC in total.

What MicroStrategy just did, however, was buy all of that BTC back and more in a single day.

“MicroStrategy has acquired 51,780 BTC… and has achieved BTC Yield of 20.4% QTD and 41.8% YTD,” tweeted executive chairman Michael Saylor. “As of 11/17/2024, we hodl 331,200 $BTC acquired for ~$16.5 billion at ~$49,874 per bitcoin.”

Yeah, this is getting ridiculous.

How on Earth can Saylor buy this much Bitcoin? Where is he getting the money to do this?

And better yet: why does his stock keep ripping to new all-time highs – well above the value of the company’s underlying BTC?

Saylor appeared for several interviews this week to explain – including on an X spaces with VanEck, where he was directly asked about it by CEO Jan Van Eck. His answer is illuminating not only regarding his stock, but the reality of capital markets today, and their hidden thirst for BTC. 

“Our operating business is a treasury operation that’s securitizing Bitcoin,” he said. “We strip the performance and the volatility off of Bitcoin and we sell fixed income instruments to the fixed income market that can’t buy bitcoin, and doesn’t want the equity, and doesn’t want the volatility.”

MicroStrategy announced another sale of its fixed-income securities – known as “convertible bonds” – the following day, attempting to raise another $1.75 billion to more BTC. This was later raised to $2.6 billion due to popular demand. 

The fixed-income investors buying these bonds have no other choice to gain BTC exposure.

As of Wednesday, MSTR tapped another all-time high of USD $498, now up 528% YTD to Bitcoin’s 109%.

2. Governments around the world are racing to establish their own strategic Bitcoin reserves, according to Dennis Porter.

The Bitcoin advocate and political strategist revealed last week that the state of Pennsylvania had introduced new legislation to establish a state-level Bitcoin reserve. Now, he claims there are many more shortly down the pipe.

“I’ve heard that the Trump team is considering an Executive Order for a National ‘Strategic Bitcoin Reserve’ in order to beat any state from passing it into law first,” he tweeted on Monday.

“I can confirm that U.S. Senate offices are backing this plan up.”

Porter claimed that the Pennsylvania legislation has already been endorsed by multiple lawmakers and a presidential candidate who has vowed to pass it into law.

BlackRock, he said, has also backed the idea of a Strategic Bitcoin Reserve, and that he has been asked to speak before Congress in two different nation-states about passing similar legislation in those countries.

Beavers, this is what nation-state FOMO looks like. Governments are quickly following America’s lead in getting their share of BTC before its too late, and plebs have had 15 years to front-run them. 

3. Donald Trump picked Bitcoin bull Howard Lutnick as his Commerce Secretary. 

In his role, the Cantor Fitzgerald CEO will lead the nation’s Tariff and Trade agenda, which both Trump and Lutnick have previously said could be used to largely replace the income taxes. 

Lutnick is a major Bitcoiner. In an interview earlier this month, he said he personally owns hundreds of millions of dollars worth of BTC.

His company plans to launch a Bitcoin lending product, and it also looks after the US Treasuries held by Tether – the world’s largest stablecoin provider. 

Though his role may not directly impact BTC, its a promising sign that Trump is surrounding himself with Bitcoiners. Robert F. Kennedy Jr – his latest pick to lead the Department of Health – said he has most of his wealth in Bitcoin earlier this year. 

Stay humble,

Andrew