In summary:
BlackRock has increased its stake in MicroStrategy to 5%, demonstrating continued support for the company’s Bitcoin-focused strategy despite recent market volatility and tax challenges.
MicroStrategy’s aggressive Bitcoin acquisition strategy, including a record $20 billion purchase in Q4 2024, has attracted institutional investors like BlackRock seeking indirect exposure to the cryptocurrency.
Despite a recent pause in Bitcoin purchases and potential tax liabilities on unrealized gains, MicroStrategy remains committed to its Bitcoin-first approach, reinforced by BlackRock’s increased investment.
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A recent SEC filing reveals that BlackRock has increased its stake in MicroStrategy (formerly known as Strategy) to 5%, equivalent to approximately 11.2 million shares.
MicroStrategy’s consistent Bitcoin purchases have made it a top choice for institutional investors seeking indirect exposure to Bitcoin.
MicroStrategy’s Stock Rises
In a recent filing, BlackRock, the world’s largest asset manager, disclosed the acquisition of additional shares in MicroStrategy. This purchase represents a 0.91% increase from its previous holdings of 4.09% in September 2024.
A Schedule 13G is filed when an investor acquires more than 5% of a publicly traded company’s shares but does not intend to influence or control the company. Institutional investors must file within 45 days of the end of the year or within 10 days if ownership exceeds 10%
According to TradingView, MicroStrategy has experienced higher trading volume following BlackRock’s purchase, with its stock on NASDAQ rising by 2%.
The timing of BlackRock’s stake increase coincides with MicroStrategy’s continued Bitcoin accumulation. The company’s recent financial results revealed a record Q4 2024 for Bitcoin purchases, with acquisitions exceeding $20 billion.
Earlier this week, Michael Saylor announced that MicroStrategy had rebranded to Strategy, incorporating the Bitcoin symbol into its official logo. Under its new brand identity, the company aims to reach a $10 billion valuation from its Bitcoin holdings in 2025.
Less than two weeks ago, Strategy purchased $1.1 billion worth of Bitcoin for the second time in a week. However, earlier this week, the company broke its 12-week Bitcoin buying streak.
“Last week, MicroStrategy did not sell any shares of class A common stock under the at-the-market offering program and did not purchase any Bitcoin. As of 02/02/2025, we hold 471,107 bitcoins acquired for ~$30.4 billion at an average price of ~$64,511 per bitcoin,”
Saylor stated.
Several factors could explain this shift. Notably, Bitcoin’s value has struggled, particularly since the threat of US tariffs on Mexico, Canada, and China triggered a downturn in the crypto market. With the potential for continued economic uncertainty, Strategy may have adopted a more cautious approach to its future Bitcoin investments.
An Unforeseen Tax Situation
MicroStrategy recently disclosed a significant tax issue stemming from its $47 billion Bitcoin holdings. The company’s $18 billion in unrealized gains could be subject to the US corporate alternative minimum tax (CAMT) enacted in 2022 under the Biden administration.
This tax, designed to prevent companies from minimizing taxable income, applies a 15% tax rate on adjusted financial statement income, potentially taxing profits even before assets are sold.
While the Internal Revenue Service (IRS) has exempted unrealized gains from stocks, it has yet to extend this to cryptocurrencies, leaving MicroStrategy potentially liable for billions in taxes starting in 2026. BlackRock’s recent purchase offers some relief for MicroStrategy as the company continues to prioritize Bitcoin accumulation.
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