MicroStrategy is at it again. The business intelligence firm, which has become better known for its massive Bitcoin holdings than for its actual software products, has raised approximately $563 million through a preferred stock offering.
The goal? Buy more Bitcoin.
This is not a new strategy. Since 2020, MicroStrategy has aggressively acquired Bitcoin, transforming itself into the largest corporate holder of the cryptocurrency.
As of January 27, 2025, the company owns approximately 471,107 BTC, acquired for around $27.95 billion at an average price of $62,473 per coin. This strategy has turned the company into a high-risk, high-reward Bitcoin proxy.
Why Is MicroStrategy Doing This?
MicroStrategy’s Executive Chairman, Michael Saylor, has long championed Bitcoin as superior to holding cash.
is strategy is simple: instead of letting company money sit in cash reserves, where inflation erodes its value, he has converted MicroStrategy’s balance sheet into a massive Bitcoin bet.
The recent $563 million capital raise follows a similar playbook. MicroStrategy issued preferred stock, a type of investment that typically offers regular dividend payments to investors.
The company is using the cash raised to buy more Bitcoin, doubling down on its belief that Bitcoin will continue to rise over time.
This initiative aligns with MicroStrategy’s broader “21/21 Plan,” which aims to raise $21 billion in equity and $21 billion in fixed-income instruments over the next three years to strengthen its balance sheet and continue its Bitcoin strategy.
What This Means for MicroStrategy and Its Stock
MicroStrategy’s stock (MSTR) has essentially become a Bitcoin tracker with extra volatility. When Bitcoin rises, MSTR tends to surge even higher.
But when Bitcoin falls, the stock takes an even bigger hit. Over the past few years, MSTR has seen massive swings, mirroring Bitcoin’s dramatic highs and lows.
With this latest capital raise, MicroStrategy is increasing its exposure to Bitcoin even further. If Bitcoin continues its upward trajectory, this move could make the company’s stock even more valuable.
However, if Bitcoin drops significantly, the risks will be amplified, especially considering the amount of debt the company has taken on to fund its crypto purchases.
The Risks and Rewards
For those looking for exposure to Bitcoin without dealing with wallets, private keys, or exchanges, MicroStrategy provides a stock market alternative. But it comes with added risks.
Unlike spot Bitcoin ETFs, MicroStrategy’s approach involves leverage. The company has previously issued debt to buy Bitcoin, meaning it carries obligations beyond simply holding the asset.
If Bitcoin falls too hard, MicroStrategy could face financial strain—especially with large sums raised through debt and stock issuance.
Another key factor is the dilution of common stock.
By issuing preferred shares, MicroStrategy is essentially bringing in new investors who will have priority for dividend payments, potentially reducing the appeal of its regular stock.
The Bigger Picture: Institutional Bitcoin Adoption
Despite the risks, MicroStrategy’s move signals that institutional confidence in Bitcoin remains strong. Companies and large investors continue to treat Bitcoin as a legitimate asset class, with MicroStrategy leading the way.
This aggressive approach could set a precedent. If successful, other firms might consider similar strategies, further integrating Bitcoin into mainstream finance.
But if the gamble backfires, it could serve as a cautionary tale about overleveraging on a volatile asset.
One thing is certain—MicroStrategy is not slowing down. Whether this bold bet turns into a legendary success or a cautionary tale will depend on where Bitcoin goes next.
