It’s no secret that MicroStrategy is one of the first public companies to invest in Bitcoin. Thanks to its investments in the first cryptocurrency, the company’s stock has increased by 740% over the past year, from $45 to $384 per share. How did they achieve this? Let’s take a closer look.
The main strategy of the company’s CEO, Michael Saylor, is the DCA (Dollar-Cost Averaging) strategy. In other words, it’s a strategy of averaging the cost of an asset in US dollars. This strategy involves purchasing an asset on a regular basis (once a week, month, or quarter), regardless of the current price. By doing this, one buys at the “bottom” and even at the ATH (All-Time High), meaning the average price of the asset will always be close to the best entry point. The benefit of this strategy lies in its simplicity and the principle that the investor doesn’t need to guess where the “bottom” or the peak will be, all while not missing the entire price movement. The core principle of this strategy is long-term investments, at least 10 years, which will generate profits regardless of the price levels at which you purchase the asset, even if part of the purchases were made at the ATH. Following this strategy, MicroStrategy recently acquired 51,780 bitcoins worth $4.6 billion.
The company has also announced that over the next 3 years, MicroStrategy will invest $42 billion in Bitcoin. In practice, this means monthly purchases of the first cryptocurrency amounting to $1.16 billion, if following the DCA strategy. Since the market is bound to experience corrections, Saylor will buy from the peak to the “bottom,” allowing him to get a better price compared to other market participants. As Robert Kiyosaki once said: the best price is the price you pay to buy the asset, not when you sell it.
To date, MicroStrategy owns approximately 331,200 bitcoins, with an average price of $49,874. The total amount of MicroStrategy’s investments in Bitcoin is $16.5 billion, and at the current price, their unrealized profit stands at $29.8 billion.
