Microstrategy has firmly cemented itself as a household name in cryptocurrency today, thanks to an effort by its influential co-founder Micheal Saylor; the software company has consistently taken bold steps in making Bitcoin its core reserve asset, purchasing huge amounts of Bitcoin to hedge against inflation and diversify its treasury. 

This strategy has significantly exposed Microstrategy to the volatility of the Bitcoin price USD and has generated considerable admiration and doubt in the financial sector, with numerous analysts questioning risk management, sustainability over time, and the wider effects on corporate finance.

Here, we’ll discuss the rationale behind MicroStrategy’s Bitcoin strategy, the milestones of its accumulation, the challenges it faces, and the potential implications for the future of corporate finance and the cryptocurrency market.

What is MicroStrategy?

Long before it started accumulating Bitcoin, MicroStrategy was known within tech circles for its intelligence software solutions that helped streamline data analysis for businesses in making better decisions.

Its co-founder, Micheal Saylor, is a pro crypto activist and has great belief in Bitcoin as a viable means of value preservation against currency devaluation. Saylor has positioned MicroStrategy to become a major corporate holder of Bitcoin as the world watches in awe at the move that will change cryptocurrency and financial markets.

The Genesis of MicroStrategy’s Bitcoin Investment

The company’s path to making Bitcoin its core reserve asset began in 2020 as the COVID-19 pandemic disrupted markets. There were major concerns towards inflation as world currency devaluation grew. 

To discover a value store that would safeguard MicroStrategy’s cash reserves from diminishing purchasing power, the firm opted for Bitcoin as a defence against financial instability.

In August of the same year, the company made its first major move, acquiring 21,454 BTC for $250 million. 

This initial investment began a transformative strategy that would redefine its balance sheet philosophy. In contrast to conventional corporate treasuries that maintain cash or low-yield bonds, MicroStrategy adopted Bitcoin for its perceived scarcity, decentralized characteristics, and long-term value prospects.

Why Bitcoin? The Rationale Behind the Strategy

Saylor believes Bitcoin is ‘digital gold”; having a fixed supply of 21 million coins, Bitcoin is viewed as a scarce asset that is capable of preserving company value better than cash or low-yield bonds. 

Unlike fiat currencies that can be printed in unlimited quantities, Bitcoin’s scarcity mirrors the qualities of gold. It gives it an edge as a superior store of value for long-term capital preservation. 

Because Bitcoin runs on a decentralized blockchain network, it means that MicroStrategy company assets become more resistant to government control, censorship, and counterparty risk. 

How Much Bitcoin has Microstrategy accumulated?

A few days into 2025, MicroStrategy bought more Bitcoin holdings of around 2,530 BTC tokens at $95,972 from Jan. 6 to Jan. 12. Currently, the company is said to own close to 450,000 bitcoins, with an average purchase price of $62,473.01 per bitcoin and a total cost of $27.954 billion.

But it doesn’t plan to stop there; Microstrategy still has plans to accumulate $42 billion of capital through 2027. The company plans to achieve this through the use of convertible notes to raise funds by utilizing short-term debt raises that allow investors to eventually cash in for MicroStrategy stock and then use the funds raised from the sale of the notes to buy Bitcoin. 

How has the Bitcoin Move affected the company?

Microstrategy has seen considerable market exposure following its audacious moves, with the company’s stock experiencing a remarkable increase of 400% since early 2024, as Bitcoin has soared to unprecedented levels – exceeding $100,000 due to optimism surrounding pro crypto policies expected from the forthcoming Trump administration.

MicroStrategy has now steadily become a hot topic joining the illustrious Nasdaq 100 Index, that includes the most actively traded companies in the world. Consequently, exchange-traded funds that follow the index have now modified their portfolios to incorporate MicroStrategy, showing the level of increased interest in the company.

Challenges and Risks

Sustainability

The hype surrounding Microstrategy does not come without its concerns from investors. While some believe the rapid growth in the company’s stock prices is the leverage they use to purchase these Bitcoin holdings, should Bitcoin’s price fall, it would cause a big fall in stock prices. 

Price volatility in Bitcoin

Bitcoin is known for its extreme volatility of price; we have seen instances where the currency lost as much as 58% of its value in a quarter of a year. A sharp decline in the value of Bitcoin would considerably affect the balance sheet of MicroStrategy and result in huge losses.

Regulatory Uncertainty

The regulatory framework regarding cryptocurrencies is continuously changing and is still mostly unexplored. Governments across the globe continue to struggle with managing Bitcoin and various other crypto assets. 

Alterations in regulations may adversely affect the price of Bitcoin and the usability of holdings, possibly resulting in higher compliance expenses, trading limitations, or even forced liquidation for the company.

The Future of MicroStrategy

From an outside perspective, the company looks to be headed in the right direction, with other big names like Matador Technologies and Meta Planet adopting MicroStrategy’s Bitcoin reserve scheme.

The success of MicroStrategy’s goals long-term will likely influence more companies to explore similar investment avenues and may see new innovations where companies may benefit from a balanced portfolio combining both traditional and digital assets.

As the wider cryptocurrency market matures and regulation becomes clearer, we could see more corporate onboarding of Bitcoin and other digital assets. MicroStrategy is focused less on speculation than on long-term capital preservation, which is the correct mindset at the treasury investment level.