MicroStrategy – after months of buying bitcoin and crypto – has decided to continue this run of excessive digital asset spending and has just purchased an additional $15 million worth of the world’s number one digital currency by market cap. The company now owns nearly $5 billion in bitcoin and is arguably the most bitcoin-centered institution out there.
MicroStrategy Has Bought Another $15 Million in BTC
The news is certainly positive in the sense that we all know there’s a serious bitcoin fan out there that will likely always pick it up when it falls to its knees. At the same time, the present scenario unveils many questions, a big one being, “Has the company taken its respect for bitcoin a little too far?”
Don’t get us wrong. The idea that such a large company could invest so much in an asset that at one stage was considered purely speculative is quite impressive, and it appears that investing in the currency has done a lot for the company as well. Right now, MicroStrategy stock shares are trading for more than $800 each, and companies such as JPMorgan have created products that allow people to gain exposure to bitcoin by investing in businesses like MicroStrategy.
In many ways, the news is good, though at the same time, it can be wondered if perhaps the firm is spending a little too much on the asset. This creates something of a problem for other investors who want to purchase bitcoin themselves. The more crypto large companies like this buy, the less that’s available for smaller investors or traders looking to gain exposure to the asset.
In addition, MicroStrategy – no matter how you look at it – is taking a huge chance with these heavy purchases. Bitcoin, while now being viewed as a hedge tool and a store of wealth by many top firms, is still extremely volatile, and there is always the possibility that the asset could ultimately drop to zero tomorrow. With so much invested in BTC, if the currency were to ever experience drops like it did in 2018, MicroStrategy could potentially wind up getting hit hard.
Many analysts claim that it’s important to keep anywhere between one and three percent of bitcoin or crypto in one’s portfolio. These numbers may seem rather small at first, but these analysts and industry heads acknowledge that the volatility of bitcoin and crypto can present several problems to traders, and they don’t want to see anyone getting seriously hurt.
Maybe It’s Time to Roll Back a Bit
With nearly $5 billion invested in BTC, it can be argued that MicroStrategy probably has a little more than three percent of its portfolio in the asset, so how far is it willing to go to prove it’s point?
This recent purchase of $15 million comes just weeks after MicroStrategy purchased another $1 billion worth of the digital currency.