- MicroStrategy owns 2% of Bitcoin’s total supply thanks to its unique convertible-debt strategy.
- Michael Saylor came up with the idea of borrowing money through loans it can convert into debt and then buy Bitcoin.
- Ten companies are now following in its footsteps.
A horde of investors have piled into MicroStrategy to ride Bitcoin’s soaring price. Now, companies are copying CEO Michael Saylor’s unique plan.
Some 144 companies are known to hold Bitcoin on their balance sheets, though not all of them mimic Saylor’s strategy.
The idea is simple. MicroStrategy uses the vast majority of money it generates to buy more Bitcoin.
The company makes about $500 million in revenue from its software business, it issues zero-interest “convertible” debt that borrowers can convert into MicroStrategy stock, and it sells new shares.
The company then piles all that money into Bitcoin purchases.
MicroStrategy’s stash of 423,650 Bitcoin is worth about $42 billion.
MicroStrategy’s stock has increased 30 times in price since launching its Bitcoin purchase strategy in August 2020.
Below are 10 companies mirroring MicroStrategy:
Marathon Digital
The Bitcoin miner is the latest to copy MicroStrategy’s convertible debt strategy.
Marathon announced on December 10 that it bought $1.1 billion in Bitcoin, bringing its total holdings to $3.9 billion. Much like MicroStrategy, the firm said it has achieved a 47% year-to-date return.
Marathon’s stock hasn’t enjoyed the same gains as MicroStrategy. It’s down 2% this year.
Bitcoin miners go their own way when it comes to corporate holdings. They are the unlockers of Bitcoin, and the majority hold on to the Bitcoin until operational costs require them to sell them to cover daily expenses.
Four of the top 10 Bitcoin holders are miners.
Nevertheless, a number of them are companies that have been adopting a convertible debt strategy like MicroStrategy.
These include Riot Platforms, which announced on Tuesday it was raising $575 million to purchase additional bitcoin and fund operational costs, Core Scientific ($1 billion), Terawulf ($500 million), and Bitdeer ($457 million).
Metaplanet
This Japanese company is another MicroStrategy imitator.
Metaplanet now holds more than 1,142 Bitcoin, or about $108 million. It plans on buying more.
“Our goal is to get to 10,000 Bitcoin in 2025,” said CEO Simon Gerovich at the Bitcoin MENA conference this week in Abu Dhabi.
The company has been touted as one of the Bitcoin Standard companies by the man who created the category, Michael Saylor.
Metaplanet’s stock is also following MicroStrategy’s path. It now trades 1,500% higher than it did at the beginning of the year.
Semler Scientific
Medical technology companies are also looking at Bitcoin to shore up their stock prices.
Semler Scientific added 303 Bitcoin to its balance sheet over the past two weeks. The biotech company said its Bitcoin returned 79% year to date.
The California-based company now holds 1,873 Bitcoin, valued at nearly $200 million.
Coinbase
Not every Bitcoin buyer is following in MicroStrategy’s footsteps. There are others who do buy the asset for the reserves, but don’t use a convertible debt strategy.
Take Coinbase. What’s astonishing about Coinbase is the sheer amount of Bitcoin it holds on behalf of other companies — and which those firms are.
More than 11% of Bitcoin’s total supply rests in the coffers of Brian Armstrong’s firm. That not only includes the more than 1 million BTC the exchange holds for itself, but it also accounts for all of the Bitcoin held in exchange-traded funds like financial giant BlackRock.
What’s more, all of MicroStrategy’s Bitcoin sits in Coinbase’s custody.
The stock has doubled this year.
Boyaa
Hong Kong gaming firm Boyaa Interactive holds 3,183 Bitcoin on its balance sheet, after it swapped on December 2 nearly $50 million in Ether for the oldest crypto asset on the market.
Boyaa now holds $310 million in Bitcoin. Bolstered by its holdings, the stock is up 870% this year.
Tesla
Elon Musk is first and foremost a Dogecoin promoter — but that doesn’t mean his company can’t buy Bitcoin as well.
The richest man in the world put Bitcoin on the balance sheet in early 2021, barely six months after Saylor kicked off his shopping spree. Musk put $1.5 billion in Bitcoin into Tesla’s reserves, although he offloaded a number of coins by mid-2022.
Musk is one of crypto’s most influential characters. When he added Bitcoin to Tesla’s balance sheet, the price spiked.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.