Strategy buys $2B in Bitcoin despite 60% stock price drawdown

Purchasing billions of Bitcoins is no longer sufficient to support the share prices of your business.

The largest corporate Bitcoin holder in the world and the forerunner of the now-troubled treasury trade, Strategy, said Tuesday that it had purchased 22,305 Bitcoin for its treasury at a cost of over $2.1 billion. This raises its overall Bitcoin holdings to 709,715—nearly $70 billion.

However, the company's fifth-largest Bitcoin acquisition was insufficient to catalyze a jump in its stock price.

Conversely, this was not the case.

Strategy's shares declined about 8% on Tuesday and have decreased by 62% over the past six months, as reported by Yahoo Finance. Since adopting its Bitcoin treasury strategy in August 2020, the stock has increased more than tenfold.

Last year, at the peak of the digital asset treasury trade, firms successfully raised billions to acquire Bitcoin to bolster share prices and enhance balance sheets; now, that enterprise has nearly ceased totally.

Strategy buys $2B in Bitcoin

Among the over 200 treasuries monitored by BitcoinTreasuries.net, merely six corporations acquired Bitcoin last week, with one purchasing 20 and another acquiring a scant two coins. The remaining three acquired 200, 123, and 115 Bitcoin, respectively.

The sixth strategy, spearheaded by Bitcoin advocate Michael Saylor, constitutes almost 90% of the weekly corporate cryptocurrency acquisitions.

Approximately 40% of the leading 100 Bitcoin treasuries are currently trading at a discount, but over 60% acquired coins at prices exceeding today's values.

Inopportune timing
The timing is inconvenient for Saylor, who recently engaged in a podcast diatribe supporting the treasury concept.

During an interview, Danny Knowles inquired if the market could support over 200 treasury companies, to which Saylor deemed the remark “ignorant and offensive.”

“What authority do you possess to assert that they are merely incurring debt to acquire Bitcoin?” Saylor stated that, despite Strategy's own disclosures indicating that 99% of the firm's capital for acquiring Bitcoin comes from issuing securities rather than from operational activities, he still disagreed with the assertion.

The strategy department did not promptly respond to a request for comment.