MicroStrategy, the largest corporate holder of Bitcoin, has announced a plan to raise $42 billion in capital over the next three years to expand its Bitcoin reserves as part of its new “21/21 Plan.”
This plan, named for its objective of raising $21 billion each from equity sales and fixed-income securities, was disclosed this plan in the company’s third-quarter earnings report, released on October 30, 2024.
According to Phong Le, President and CEO of MicroStrategy, the goal is to achieve a “higher BTC Yield,” a metric the company uses to evaluate the performance of its Bitcoin acquisition strategy. This metric, which MicroStrategy began using in August 2024, measures the percentage change in the ratio of its Bitcoin holdings to fully diluted shares.
MicroStrategy announces $42 billion capital plan including $21 billion ATM equity offering and a target of raising $21 billion in fixed-income securities. Join us at 5pm ET as we discuss our quarterly results and #Bitcoin Treasury Company plans. $MSTR https://t.co/eXYELbN1Dm
— Michael Saylor⚡️ (@saylor) October 30, 2024
MicroStrategy noted that it is setting a long-term BTC Yield target of 6% to 10% annually for 2025 through 2027. According to the report, it has risen by 17.8% so far in 2024.
Meanwhile, the company reported adding 25,889 BTC to its reserves, and thus bringing its total Bitcoin holdings to 252,220 BTC, valued at approximately $18.23 billion — an unrealized profit of $8.27 billion based on current prices. As of its Q2 report, the company’s Bitcoin holdings were 226,500 BTC, with a market value roughly 70% higher than the cost basis.
MicroStrategy’s aggressive capital-raising strategy and commitment to increasing its Bitcoin reserves reflect its confidence in the asset and the growing demand for Bitcoin in the investment landscape. The company’s founder and executive chairman, Michael Saylor, a well-known advocate for Bitcoin, highlighted the extraordinary demand for the asset in a recent interview, pointing out that Bitcoin investment products are nearly ten times larger than the current market supply.
Notably, the company’s approach has inspired other companies to follow suit, including Japan-based Metaplanet, which recently announced its adoption of MicroStrategy’s “BTC Yield” as a key performance indicator (KPI). CEO Simon Gerovich emphasized that the metric offer investors clearer insight into how Bitcoin acquisitions contribute to shareholder value.
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