In a strategic move that has captured the attention of both traditional finance and the cryptocurrency world, MicroStrategy, led by Michael Saylor, has moved to rebrand itself to “Strategy.”
This change marks a significant move from the company and looks to distance itself from the “Micro” part of the name, essentially allowing it to appear like a “big” player in the Bitcoin acquisition space. Now that we have begun the first quarter of 2023, in conjunction with its rebranding, Strategy has also moved to roll out new metrics and strategies for optimizing its Bitcoin Treasury.
In the fourth quarter of 2024, Strategy went all in on Bitcoin, amassing a colossal 218,887 BTC, the most it has ever bought in a single quarter. Now, it holds more than 447,470 BTC in total, worth around $41.8 billion. Even as the crypto market seemed to be crashing last year, Strategy’s latest Bitcoin buy carried an average cost of $93,600 per coin, making clear the company’s steep conviction in its digital bet.
The way Strategy goes about acquiring Bitcoin is not just about how big the stash can get; it’s also about using a methodical, slow-but-steady strategy that maintains discipline and shows growth in the Bitcoin treasury. In Q4 alone, the company spent $20.5 billion acquiring Bitcoin, and this makes for a clear market signal that Strategy is just as likely to acquire Bitcoins today as it was a year ago. Heading into 2025, the company makes no secret of its plans to keep pushing the Bitcoin treasury higher and higher.
To finance its plans to amass a Bitcoin treasure, Strategy in 2024 pulled in a remarkable $22 billion. Of that, $15 billion was achieved through straight equity offerings, and another $3 billion came from convertible debt. For 2025, Strategy is looking to explore other means of capital raising, including fixed-income instruments like convertible notes and preferred stock, plus a good ol’ bond. This method of capital raising illustrates the company’s narrow focus on securing the resources needed to fulfill its Bitcoin congregation and treasury management plans.
In a further landmark development, Strategy has now officially entered the Nasdaq-100, a signal step towards institutional adoption of Bitcoin. This inclusion is a big deal, for it not only raises Strategy’s profile within the traditional financial world but also sets the stage for ETFs tracking the Nasdaq-100 to include MSTR (the stock of Strategy). These funds, with an estimated $550 billion in assets under management, are now have Bitcoin assets.
For its rebranding, Strategy has kicked off a fresh set of Key Performance Indicators (KPIs) that aim to track how efficiently Bitcoin’s treasury strategy works. One of the new metrics, dubbed BTC Yield, essentially measures how well the company is making money off its Bitcoin holdings. Now, in 2024, Strategy’s BTC Yield was a staggering 74.3%, with a goal of not dropping below a 15% annual yield in the coming year. To put it another way, and no offense to Strategy, but what this really tells us is how inefficiently lots of other companies using Bitcoin are being with it.
Another fresh KPI brought forth by Strategy is BTC $ Gain, which is aiming for a $10 billion target by 2025. These metrics are a clear attempt at giving greater transparency and real-time insights into the performance of Strategy’s Bitcoin treasury and are about as close as investors have ever come to having a clear view into a public company’s Bitcoin holdings, share price, and corresponding market activity. The company also has a website that’s pretty much dedicated to this real-time tracking, making the intent of this transparency effort all the more pronounced.
The capital deployment approach at Strategy is equally disciplined. In 2024, the company carried out the largest ATM program ever, raising $21 billion with minimal market impact. The strategy behind this is straightforward yet effective. By limiting the ATM program to just 2.9% of total trading volume, we can ensure that we maximize our Bitcoin accumulation without disrupting market conditions or driving the price of Bitcoin up too quickly.
Leverage-wise, Strategy aims for a relatively low ratio of 20%-30% of its Bitcoin holdings, a target set to balance risk against the need to have flexible capital to raise in order to grow. Leverage is well below target and there are no plans to increase Bitcoin-related leverage in the near term. In 2025, Strategy might issue fixed-rate bonds as a way to finance further acquisitions of Bitcoin while reaping the benefits of a Bitcoin bull market and avoiding the risks associated with a Bitcoin bear market. Should Strategy proceed with this financing strategy, its treasury manager role for Bitcoin would be almost peerless.
Strategy’s new image and its bold accumulation of Bitcoin have made the company a real pioneer among corporations in Bitcoin treasury management. It now holds 447,000 BTC and is by far the largest holder of Bitcoin in the corporate sector. Its influence appears to be growing, and in any case, it’s clearly leading something, since it recently raised $22 billion in capital, and its stock is now part of the Nasdaq-100.
While the Fortune 500 company is not disclosing their Bitcoin holdings, its treasury strategy promises to remedy an era of darkness around corporate Bitcoin investments. With clear metrics and an understandable logic of why Bitcoin, as an emerging store of value, is worth adding to a balanced corporate treasury, the company is setting a new standard not just for itself but for the whole industry. The path this company is going down with its Bitcoin investment looks sustainable and sound, unlike some past Bitcoin investments made by other corporations.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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