Bitcoin Hits $122,000: Strategy Strengthens Position with $740 Million

Michael Saylor is known for being direct and quick to act. When he talks about Bitcoin, he makes moves fast. Soon after the first tweet, a large purchase was underway: 6,220 BTC bought calmly amid a surge of optimism. This wasn’t just a purchase; it was a clear signal to the market, showing strength. It indicated that Strategy was running at full speed, with Saylor leading the charge.

A vivid scene shows Saylor holding a mountain of bitcoins, with an orange burst behind him and coins labeled "0M" in a style reminiscent of 1970s comics.

In brief:

Strategy spent about $740 million to buy 6,220 BTC, averaging $118,940 each. The company's total Bitcoin holdings are now 607,770 coins, about 3% of all Bitcoin ever mined. The purchase was funded by selling shares, not using cash from the company’s reserves. Market value of MSTR exceeds its Bitcoin holdings by 70%. A Precise Move for a Bitcoin Leader

After the purchase was announced, things moved quickly. On July 20, Strategy filed a form with the SEC confirming it had bought 6,220 BTC for $739.8 million. The average price was about $118,940 per coin. This brought the company's total Bitcoin to 607,770 coins, costing around $43.6 billion. During that time, Bitcoin was near $122,000 but then dropped back to around $118,000.

This buying spree is not a one-time thing. Since April, Strategy has been making monthly purchases. In July alone, it bought 10,455 BTC. June saw 17,075 BTC bought. Saylor is clearly committed to this long-term plan, steadily accumulating more Bitcoin.

This strategy sees Bitcoin as a stable reserve asset. Strategy isn’t acting like a trader trying to profit from short-term price swings. It’s consistently buying, as it announced back in 2020.

The Art of Funding Without Draining Cash

But where does the money come from? It’s not from the company’s cash reserves. Strategy raises funds by issuing new shares and convertible bonds. For this purchase, it raised about $736.4 million by selling 1.63 million shares. It also sold some preferred shares, raising a few extra million.

This approach fits into the "42/42" plan. The goal is to raise $84 billion by 2027 to buy more Bitcoin. The plan uses zero-coupon bonds, which don’t pay interest but increase in value until maturity. The idea is that Bitcoin’s growth will cover the cost of the borrowed money.

However, this plan has risks. In March, Bitcoin’s price dropped 30%, causing nearly $6 billion in unrealized losses for Strategy. That caused its stock to fall sharply. The system depends heavily on Bitcoin’s value staying high, making it vulnerable to crashes.

Buying a Key Crypto or a Promise?

The problem is that Strategy’s stock is worth much more than its actual Bitcoin holdings. Its stock valuation is around $105 billion, but its Bitcoin is worth about $62.6 billion. That means each dollar invested in the stock only equals about 59 cents worth of Bitcoin.

The 70% premium shows excitement for Saylor’s plan but also raises questions. Some analysts point to the Nasdaq-100 effect, where index funds buy stocks automatically, pushing prices higher even if fundamentals don’t support it.

Strategy also makes its own indicators, like Bitcoin yield—measuring how much Bitcoin each share owns. But issuing more shares can inflate this ratio artificially, making it seem like performance is growing. In reality, the actual portion of Bitcoin per share might be decreasing.

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