Recently renowned Bitcoin maxi Michael Saylor unveiled the “21/21 plan” for his company Microstrategy. Essentially, it’s a massive fundraising plan that ultimately aims to raise $42 billion over the next three years in order to purchase more BTC. This monetary goal will be split into $21 billion raised through equity and the other $21 billion through debt offerings. The market and wider crypto community has reacted strongly to the news, and it’s also a good reminder on the potential legacy that Saylor can have on the entire crypto industry. Microstrategy represents one of the earliest and most significant institutional crypto advocates, and their historical activity and recent plan warrant an analytical deep dive.
What is Microstrategy and why do they matter to Crypto
MicroStrategy (MSTR) was founded in 1989 by Michael Saylor and Sanju Bansal. It began as an enterprise business intelligence software company that offers data-driven decision-making and process optimization for businesses. Microstrategy’s products aim to improve business productivity through features like interactive dashboards, automated report generation, and more. The company IPO’d in 1998 and has served major business clients like McDonald’s and Facebook. In recent years, Microstrategy has become prominent in financial news media due to frequent Bitcoin accumulation on its balance sheet. Michael Saylor currently serves as the company’s Executive Chairman, and is a notable proponent of Bitcoin. He has publicly stated his views that Bitcoin is a superior, long-term investment compared to fiat currencies due to the blockchain’s global and decentralized attributes. Saylor’s positive outlook on Bitcoin aligns with his bold investment strategy for MicroStrategy, resulting in the company having one of the world’s largest corporate Bitcoin holdings.
History and Timeline of Microstrategy’s Crypto Purchases
In August 2020, MicroStrategy made headlines after declaring its first major Bitcoin purchase, touting the cryptocurrency’s function as a dependable store of value with greater long-term growth potential than cash. The company announced that it was acquiring 21,454 BTC for roughly $250 million, representing a significant shift in the company’s financial management. This move catalyzed the company’s strategic investment approach in Bitcoin, and rather than a one-time acquisition. Since then, MicroStrategy has steadily expanded
Selling Stocks to Buy Bitcoin
In late October 2024 Microstrategy revealed the “21/21 plan” that would see the company issue and sell $21 billion in its own stock. Typically such an announcement would be damaging for shareholders of a publicly traded company. Since MicroStrategy’s market capitalization hovers around $50 billion at the time of announcement, this move would dilute the ownership represented by existing shares by roughly one-third. Consequently, a stock price drop of around 33% should be expected. However, MicroStrategy doesn’t behave like most stocks because of its Bitcoin acquisitions over the past four years. Shares actually rose about 1% the day after this plan was unveiled, and it has more than tripled so far this year. The willingness of MicroStrategy shareholders to accept such dilution without insisting on a significant discount reflects their strong confidence in Saylor’s corporate strategy.
MicroStrategy’s venture into Bitcoin marks a turning point for corporate approaches to digital assets. By harnessing Bitcoin as both a store of value and an investment asset, MicroStrategy seeks to optimize its treasury management while positioning itself as a leader in a shifting financial landscape. Michael Saylor’s pledge to leave his Bitcoin holdings “to civilization” highlights his deep belief in its transformative potential. While there will always be a worry of his company needing to offload large quantities of Bitcoin in times of financial stress, thus creating short-term market volatility, Saylor has proved to be a maverick leader who pioneered novel balance sheet management strategies to include cryptocurrency. Time will tell how his large bet will pay off, but his daring has undoubtedly already left a mark in fields of both traditional and on-chain finance.
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