MicroStrategy's recent Bitcoin purchases have quickly drawn attention. Just one day after the company announced this large transaction, the Bitcoin price fell sharply.
On December 14, 2024, MicroStrategy announced it had acquired an additional 10,645 BTC with a total value of approximately 980.3 million USD, averaging 92,098 USD per coin. At that time, the Bitcoin price was at a local high.
A purchase decision made at the wrong time, at least in the short term.
The timing of the purchase was quite unlucky. Just one day after MicroStrategy announced the acquisition, the Bitcoin price fell to around 85,000 USD, and at times even lower. At the time of writing, BTC is still below 80,000 USD.
The decline in Bitcoin prices occurred simultaneously with a market-wide sell-off, caused by concerns over Japan raising interest rates, many leveraged positions being liquidated, and market makers reducing risk. MicroStrategy bought just before this wave occurred.
When Bitcoin prices fall, MicroStrategy's stock also plummets sharply. In the last 5 trading sessions, the stock price has lost over 25%, meaning it has dropped even more than Bitcoin.
Although the stock has slightly recovered today, it is still much lower than the price before the acquisition news.
Currently, MicroStrategy holds 671,268 BTC, with an acquisition value of approximately 50.33 billion USD at an average price of 74,972 USD per coin.
In the long run, the company is still making significant profits.
However, in the short term, the situation is different. When Bitcoin is close to 85,000 USD, the most recent purchase has incurred temporary losses on the books.
MicroStrategy's mNAV value is currently around 1.11, meaning the company's stock is trading above the value of the Bitcoin held by approximately 11%. This spread decreases rapidly when Bitcoin prices fall, and stock investors become more cautious about risks.
Investors do not doubt MicroStrategy's Bitcoin thesis, but they are concerned about the timing of the purchase and risk management.
Macroeconomic factors causing Bitcoin to decline had been warned about beforehand. The market has discussed the risk of Japan raising interest rates and its impact on 'carry trade' with the Yen for weeks.
In the past, Bitcoin often dropped sharply when the Bank of Japan tightened monetary policy. This time is no different.
Many believe that MicroStrategy was not patient enough to wait for clearer macro signals and instead bought near the resistance zone, just as global liquidity became tighter.
Is this really a mistake?
Everything depends on the perspective of time.
If viewed from a short-term trading perspective, this purchase seems unreasonable as the price dropped sharply immediately after the purchase, and the stock is suffering heavier losses due to financial leverage, market sentiment, and narrowing NAV spreads.
As for the strategy, MicroStrategy has never attempted to time the bottom correctly. The company buys with a long-term holding perspective, not to optimize short-term prices.
CEO Michael Saylor always emphasizes that holding as much Bitcoin as possible is essential; the timing of entry is not too important.
The real issue does not lie in the recent purchase but in what will happen next.
If Bitcoin remains stable and macroeconomic risks ease, this purchase will blend into the long-term average value of MicroStrategy. But if Bitcoin continues to drop significantly, this decision will become a topic of criticism.
Perhaps MicroStrategy is not the worst Bitcoin buyer of 2025. But this is certainly the most 'painful' and controversial deal.
