Bitcoin
Plans for $42 Billion in Bitcoin Holdings
In its Q3 earnings report, MicroStrategy announced a $42 billion capital-raising initiative aimed at Bitcoin (BTC) acquisitions over the next three years.
This marks one of the most ambitious BTC investment plans ever undertaken by a public company.
MicroStrategy Q3 Earnings: What Investors Need to Know
Executive Chairman Michael Saylor and CEO Phong Le revealed MicroStrategy’s “21/21 Plan” during MicroStrategy’s Q3 2024 earnings call. They aim to acquire significant Bitcoin reserves between 2025 and 2027. According to Saylor, this aggressive strategy solidifies Bitcoin as “digital capital,” adding that it could redefine corporate treasury strategies and financial markets.
“Today, we are announcing a strategic goal of raising $42 billion of capital over the next 3 years, comprised of $21 billion of equity and $21 billion of fixed income securities, which we refer to as our ‘21/21 Plan,” the report read.
The funds will primarily target Bitcoin acquisitions as part of MicroStrategy’s three-year capital market strategy. Recently, the company filed a record-setting $21 billion at-the-market (ATM) equity offering, marking the largest of its kind in financial history.
Read more: Who Owns the Most Bitcoin in 2024?
The firm, known for its steadfast commitment to Bitcoin, already holds 252,220 BTC, worth over $18 billion. This follows a Q3 acquisition of 25,889 Bitcoins for $1.6 billion at an average price of $60,839 each. However, the company reported a 10.34% decline in revenue, down to $116.07 million for Q3.
Despite the drop, Saylor emphasized that MicroStrategy’s future lies in its Bitcoin-centric approach. As the “world’s first and largest Bitcoin treasury company,” it envisions maintaining an intelligent leverage strategy. Notably, the intention is to protect long-term shareholder value while building financial products rooted in Bitcoin.
MicroStrategy also targets a 6-10% annual “Bitcoin yield” — metric comparing Bitcoin holdings to diluted shares. This plan indicates the company’s vision to move beyond simply holding Bitcoin, potentially developing a market for Bitcoin-backed securities.
“Bitcoin is the best use of proceeds, maybe in the history of the capital markets…We are going to buy and hold Bitcoin indefinitely, exclusively, securely. If you’re waiting for us to hedge, to sell it, to get out on top, if you’re looking for us to diversify, go elsewhere,” Saylor remarked.
MicroStrategy’s adoption of Bitcoin-based capital products could set a precedent for digital asset-driven finance. Meanwhile, Robinhood also released its Q3 earnings. As BeInCrypto reported, the results highlighted its strategic expansion in crypto-related offerings.
This aligns with MicroStrategy’s ambitions for digital assets. With over $10 billion in net deposits for the third consecutive quarter, Robinhood’s assets under custody reached a record $152 billion.
Meanwhile, revenue grew 36% year-over-year to $637 million. Given Robinhood’s entry into prediction markets, this could increase significantly in Q4. This is as the development coincides with the 2024 US election cycle and marks one of its most intriguing expansions.
“Looking ahead, we’re energized by the progress we’re making and believe we are well positioned to drive higher earnings and free cash flow per share over time, driven by our 20% plus net deposit growth, diversified business model, and 90% fixed cost base,” Robinhoo CFO Jason Warnick said.
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The new feature allows users to trade based on the likely outcomes of elections, which is a potentially lucrative addition, given the growing public interest in prediction markets.
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