MicroStrategy Plans More Bitcoin Purchases Amid Economic Concerns

Oil ended October at 117.64 dollars a barrel, US inflation is at 3.7%, and two Federal Reserve officials advocated for a rate hike last week. Despite this, Michael Saylor indicated that MicroStrategy could announce another Bitcoin purchase on Monday. Saylor shared a Bitcoin-buying chart, stating, "We found room for even more orange." This strategy reflects high-conviction accumulation, buying through uncertainty with the expectation of long-term asset value growth. Saylor expressed confidence in a forthcoming Bitcoin bull market during Thursday's earnings release. Rising oil prices are contributing to inflation, with gasoline prices increasing by 34.2% year-over-year as of September. The Fed maintained rates at 3.75%-4% on October 28, although some officials favored an increase. Higher yields may make safer assets more appealing than Bitcoin, complicating MicroStrategy's fundraising efforts. MicroStrategy currently holds 848,517 BTC, valued at approximately 66 billion dollars, against a purchase cost of 64 billion dollars, with its paper profit narrowing. In October, it purchased 334, 250, and 267 BTC over three weeks before pausing to spend 204.9 million dollars on buying back its preferred shares. The company also sold 5,552 BTC in Q3 to finance dividends and buybacks. Issuing new MSTR shares to acquire Bitcoin can dilute shareholder value, as evidenced by a 3.7% drop in Bitcoin-per-diluted-share this year. New MSCI rules may jeopardize MSTR's index membership, potentially prompting passive fund sales. The upcoming filing will reveal if MicroStrategy made additional purchases.