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MicroStrategy Stops Buying Bitcoin – What’s Next?
Business intelligence and technology firm MicroStrategy has taken a pause in its aggressive buying spree of the popular cryptocurrency, Bitcoin (BTC). In 2020, the company announced it had acquired approximately $1 billion worth of Bitcoin, and over the past year, it continued to purchase more, taking its total holdings to around $3.8 billion.
The decision comes as MicroStrategy faces a cash crunch. To address this issue, the company has reportedly raised around $42 billion via various financial instruments, including preferred stock sales, convertible debt offers, and at-the-market stock sales. However, despite these efforts, there is no indication that MicroStrategy plans to abandon its Bitcoin-centric strategy.
In fact, the company recently proposed a $250 million preferred share sale and successfully sold about 7.3 million shares, doubling the initial amount. This move suggests that MicroStrategy is not backing down from its commitment to Bitcoin.
So, what’s next for the company?
Firstly, it appears unlikely that MicroStrategy will stop buying Bitcoin entirely. The company has consistently demonstrated its confidence in the digital currency, and its recent stock sale further reinforces this stance.
Secondly, as a publicly traded firm, MicroStrategy may need to prioritize financial stability over further Bitcoin acquisitions. It’s possible that the company is focusing on settling its current debt obligations or optimizing its resources before resuming its buying spree.
Lastly, it’s crucial for MicroStrategy to address increased tax burdens related to its massive unrealized gains in Bitcoin. With these liabilities in mind, the company may re-evaluate its financial planning and potentially consider strategic changes to manage these obligations effectively.
By recalibrating its approach, MicroStrategy can continue to invest in Bitcoin while addressing ongoing financial challenges.
Source: bitcoinist.com
