Hello! Today, we will learn about MicroStrategy, the world's largest listed company in Bitcoin holdings. This company, which started out as a software company and became famous for investing in Bitcoin, will explain its establishment background, main business, Bitcoin purchase method, funding strategy, and the pros and cons of its management strategy.
1. Establishment Background of MicroStrategy
MicroStrategy was founded in 1989 in the United States by Michael Saylor. Sailor, who graduated from MIT Aeronautical Engineering, developed business intelligence (BI) software that uses data to help companies make decisions. BI is a technology that analyzes data to establish strategies, for example, it is used to adjust inventory by looking at sales data. After going public on NASDAQ in 1998, the stock price plummeted due to the dot-com bubble, but it survived with software technology and established itself as a data analysis specialist.
2. Main business: Data analysis software
MicroStrategy's main business is providing business intelligence software. It analyzes data based on the cloud to help companies operate efficiently. Its main customers are large corporations and financial institutions, and as of 2024, its headquarters is in Virginia, USA, and it has about 1,934 employees. However, compared to recent Bitcoin investments, its main business has not been receiving much attention. The company's stock price is greatly influenced by the price of Bitcoin.
3. Bitcoin purchase method
MicroStrategy started investing in Bitcoin in 2020. Michael Saylor sees Bitcoin as "digital gold" and an alternative to inflation (the value of money decreases due to rising prices). In August 2020, he bought 21,454 coins with $250 million in cash, and as of February 2025, he holds 490,096 coins. This is 2.5% of the Bitcoin circulation, and the average purchase price is $66,357. He initially bought them with cash, but later increased his purchases by raising funds through stock and bond issuance.
4. Funding Strategy
MicroStrategy raises funds for Bitcoin purchases through ATM stock issuance and convertible bonds. ATM stock issuance is a way to raise money by selling stocks when needed, and convertible bonds are bonds that can be converted into stocks later. The '21/21 Plan' announced in 2024 is a plan to raise $42 billion (stocks 21 billion, bonds 21 billion) over three years to buy more Bitcoin. By November 2024, it held more than 380,000 units worth $13.5 billion.
5. Management Strategy Pros and Cons
MicroStrategy's Bitcoin-centric strategy has clear pros and cons.
Pros
1. Profit when Bitcoin price rises: The stock price rose 500% due to the surge in Bitcoin in 2024, and the investment return is greater than the main business.
2. Inflation response: It can protect assets when the value of the dollar falls.
3. Image innovation: It changed its name to Strategy in 2025 and transformed into a digital asset company, and was included in the NASDAQ 100.
Cons
1. Price decline risk: If Bitcoin falls, assets and stock prices will be hit.
2. Debt burden: If the debt is $7 billion in 2025 and Bitcoin falls below $16,000, the risk of repayment is high. 3. Neglecting the main business: Software business may take a backseat.
MicroStrategy has become a pioneer in digital assets from a software company with Bitcoin. With the ‘21/21 Plan’, they are investing $42 billion to increase their Bitcoin holdings. Success depends on the Bitcoin price. If the price rises, they can make big profits, but if it falls, they can face a crisis. What do you think of this strategy? Please leave your comments!
