Welcome to our beginner's guide to MicroStrategy's bitcoin strategy. This FAQ covers the basics: what MicroStrategy is, why they buy bitcoin, how they do it, and what it means for the crypto market.

What is MicroStrategy?

MicroStrategy is a business intelligence and software company that has become the largest corporate holder of bitcoin. Founded in 1989, it provides analytics software, but it has gained fame for its aggressive bitcoin acquisition strategy.

Under CEO Michael Saylor, MicroStrategy began buying bitcoin in August 2020 as a primary treasury reserve asset. The company has since accumulated over 200,000 BTC, making it a significant player in the crypto ecosystem.

Why does MicroStrategy buy bitcoin?

MicroStrategy buys bitcoin as a hedge against inflation and a store of value, similar to digital gold. CEO Michael Saylor believes bitcoin is superior to cash and bonds because it preserves purchasing power over time.

The company's strategy is to accumulate bitcoin and hold it long-term, using debt and equity offerings to fund purchases. This approach has turned MicroStrategy into a leveraged bitcoin play, attracting both crypto enthusiasts and traditional investors.

How does MicroStrategy buy bitcoin?

MicroStrategy buys bitcoin primarily through its own cash flows and by raising capital through debt or equity offerings. It has issued convertible notes and sold shares to fund acquisitions.

The company also uses a treasury strategy that involves periodic purchases, often announcing each buy. For example, in 2024, it reported buying thousands of BTC in multiple transactions, using proceeds from its ATM stock offering program.

When did MicroStrategy start buying bitcoin?

MicroStrategy made its first bitcoin purchase on August 11, 2020, acquiring 21,454 BTC for $250 million. That initial investment has grown significantly in value as bitcoin's price rose.

Since then, the company has continued buying, with notable accelerated purchases in 2024 and beyond. As of early 2025, MicroStrategy's bitcoin holdings are worth tens of billions of dollars.

What is the current value of MicroStrategy's bitcoin holdings?

As of early 2025, MicroStrategy holds approximately 226,500 BTC, valued at over $15 billion at current market prices. The exact value fluctuates with bitcoin's price.

To see the latest number, you can check MicroStrategy's public filings or their official bitcoin holdings page. The company updates its holdings regularly, and the market often reacts to each announcement.

How does MicroStrategy's bitcoin strategy affect its stock?

MicroStrategy's stock (MSTR) has become a proxy for bitcoin, often moving in tandem with the cryptocurrency's price. Because the company's market value is largely tied to its bitcoin holdings, investors see MSTR as a leveraged way to gain bitcoin exposure.

For example, when bitcoin rises, MSTR tends to rise more due to its debt leverage. Conversely, when bitcoin drops, MSTR can fall sharply. This correlation makes MSTR popular among traders but also riskier than owning bitcoin directly.

What are the risks of MicroStrategy's bitcoin strategy?

The main risks are bitcoin's volatility and the company's leverage. If bitcoin's price crashes, MicroStrategy could face margin calls or a drop in its stock value.

Another risk is regulatory, as governments could impose restrictions on bitcoin holdings. Additionally, the company's heavy reliance on debt to buy bitcoin increases financial risk if bitcoin generates lower returns than the cost of borrowing.

Despite these risks, MicroStrategy has so far been profitable on paper, and its CEO remains bullish on bitcoin's long-term potential.

How does MicroStrategy compare to other bitcoin holders?

MicroStrategy is the largest corporate bitcoin holder, but other companies like Tesla and Block also hold bitcoin. However, MicroStrategy holds far more than any other public company.

Compared to exchange-traded funds (ETFs), MicroStrategy is a direct holder, while ETFs like the iShares Bitcoin Trust (IBIT) hold bitcoin for investors. MicroStrategy's stock offers leveraged exposure, while ETFs offer direct exposure with lower risk.

For investors, choosing between MSTR and an ETF depends on their risk tolerance and investment goals.

Conclusion

MicroStrategy's bitcoin strategy has made it a unique player in the crypto and stock markets. By converting its treasury into bitcoin, the company has aligned its fortunes with the cryptocurrency's success.

For beginners, understanding MicroStrategy is a great way to learn about bitcoin as an investment. However, always remember that the market is volatile, and it's essential to do your own research before investing.