MicroStrategy's Four-Year Bitcoin Anniversary: Reviewing Its Acquisition Strategy and Market Impact
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MicroStrategy's Four-Year Bitcoin Anniversary: Reviewing Its Acquisition Strategy and Market Impact
MSTR and Bitcoin show a positive correlation, which strengthens with each purchase.
Navigating Web3 tides with focused insightsAuthor: Valdrin Tahiri, CCN
Translated by: Fairy, ChainCatcher
Key Takeaways
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MicroStrategy (MSTR) began purchasing Bitcoin in August 2020.
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The company made five purchases totaling over 15,000 BTC.
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Is there a correlation between these purchases and MSTR's stock price?
On August 11, 2020, MicroStrategy made its bold entry into Bitcoin (BTC), making headlines and ushering in a new era for the entire industry.
Led by Michael Saylor, MicroStrategy rapidly emerged as one of the largest publicly traded companies holding Bitcoin, transforming how corporations think about treasury management and shifting the broader industry’s perception of digital assets.
As we mark the fourth anniversary of this pivotal decision, let’s examine some of MicroStrategy’s major Bitcoin purchases and explore how these strategic moves have influenced the market.
The First Purchase
MicroStrategy’s most iconic purchase occurred on August 11, 2020.
At that time, Chairman Michael Saylor announced that the Nasdaq-listed company had acquired 21,454 BTC for $250 million. This investment marked a significant shift in MicroStrategy’s strategy, integrating Bitcoin into its corporate financial framework.
Saylor described Bitcoin as a "reliable store of value" and an effective hedge against inflation.
His vision was clear: to set a new standard in corporate treasury management and demonstrate confidence in Bitcoin’s future. And indeed, he did—MicroStrategy has since become one of the top-performing tech stocks globally.
Following the announcement, Bitcoin’s price surged, reflecting growing market confidence in its legitimacy as an asset. MicroStrategy’s stock also rose as investors applauded the bold move. This initial purchase paved the way for MicroStrategy to become a leading public Bitcoin holder, reshaping industry norms.
Top 5 Bitcoin Purchases
Bitcoin purchases have played a key role in MicroStrategy’s stock performance.
Below are MicroStrategy’s five largest Bitcoin purchases, ranked by the number of BTC acquired rather than total purchase cost:
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December 21, 2020 – 29,646 BTC
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August 11, 2020 – 21,454 BTC
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February 24, 2021 – 19,452 BTC
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September 14, 2020 – 16,796 BTC
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November 30, 2023 – 16,130 BTC
In terms of stock performance, MicroStrategy (MSTR) shares rose in four out of the five weeks when the company made its largest Bitcoin purchases (indicated by white icons). The only exception was during the week of the third-largest purchase (marked in black), when MSTR’s stock dropped over 13%.
While MSTR’s stock rose 80% of the time following major Bitcoin purchases, the relationship isn’t as straightforward as it may appear. Stock gains don’t always align directly with the size of the purchase.
MSTR’s stock movements ranged from 5% to 21%. In fact, the most impressive gain occurred in August 2020, when shares surged 21%, followed by a 12% rise in September 2020.
While MicroStrategy’s stock has generally performed well, how has Bitcoin fared?
Impact on Bitcoin’s Price
Bitcoin’s price performance mirrors that of MicroStrategy. BTC prices rose in four out of the five major purchase periods. The sole exception was during the third-largest purchase in February 2021, when Bitcoin’s price declined.
Notably, Bitcoin’s largest price increase occurred during the biggest purchase in December 2020, rising 12%. This contrasts with MSTR’s stock performance, where the largest stock gains weren’t necessarily tied to the largest purchases.
With this in mind, consider whether an increasingly tight link exists between MicroStrategy’s stock price and Bitcoin’s value. As MicroStrategy’s Bitcoin holdings grow, one might expect their price movements to become more closely aligned.
And indeed, that appears to be the case. Prior to MicroStrategy’s first Bitcoin purchase in August 2020 (marked in black), there was almost no correlation between MSTR and Bitcoin prices. The correlation coefficient (shown in blue) fluctuated near zero, indicating no real relationship between the two assets.
However, since August 2020, the situation has changed significantly. Correlation turned positive, sometimes reaching perfect positive correlation. This indicates that price movements between the two now closely mirror each other.
This pattern is clearly visible when comparing price charts: MSTR (white) and Bitcoin (orange) move in strong alignment, especially during the current bull market. This synchronization suggests that as MicroStrategy accumulates more Bitcoin, its stock price increasingly reflects Bitcoin’s performance, demonstrating a strengthening relationship.
Correlation occasionally drops to 0 or even negative values (circled in black). Interestingly, all such instances coincided with local or absolute bottoms for Bitcoin. This bodes well for future Bitcoin and MSTR prices, given that the current correlation stands at 0.20.
Therefore, a positive correlation exists among MicroStrategy’s large-scale purchases, Bitcoin’s price, and MSTR’s stock price. The correlation between MSTR and Bitcoin is also positive and strengthens with each purchase.
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