Corporate Bitcoin Holders Enjoy Price Surge

Large holders have enjoyed surging crypto prices and increasing interest in BTC.

Microstrategy is back in the black after 18 months

Some of the largest and most high-profile bitcoin holders have been enjoying bumper profits from the recent surge in prices.

Microstrategy: Back In The Black

Michael Saylor's Microstrategy has been holding and adding to its position through the bear market, and is now finally in the black for the first time in 18 months. Not content to heave a sigh of relief, Saylor continues to buy BTC, with Microstrategy's latest purchase being announced last week: 155 BTC at an average price of $34,194.

Microstrategy has been acquiring BTC for over three years, starting with a purchase of 21,454 for $250 million in August 2020—approximately $11,650 per coin. This was followed by further major purchases, significantly raising the average price to around the $30k mark. For example, at the peak of the bull market in November 2021, the company bought 7,002 BTC for $414 million: Over $59,000 per coin.

As the bear market wore on, Saylor continued to buy. His strategy has been vindicated with the breakout above $30,000. Microstrategy now holds 158,400 BTC. The company's average purchase price is $29,610/BTC, with a total cost basis of $4.69 billion—an unrealized profit of almost a billion dollars at current prices.

Block: $45 Million Q3 BTC Revenue Gains

Block, Jack Dorsey’s Bitcoin-centric fintech firm, enjoyed a profitable Q3 with over $5.6 billion in revenues, largely thanks to the Cash App and Square.

Bitcoin transactions have picked up, with over $2.4 billion in BTC being sold through the Cash App, earning the company $45 million. Block also holds over 8,000 BTC, now worth $280 million.

Grayscale: Approaching Fair Value

Finally, there's good news for Grayscale Bitcoin Trust (GBTC), which holds 643,572 BTC, over 3% of total supply, with a current market value of $22.5 billion. Recent anticipation that the SEC will soon approve a Bitcoin spot ETF, and the rising likelihood that Grayscale will be able to convert GBTC into such a product, have helped to reduce the "Grayscale Discount" to below 13%. Eleven months ago, it was almost 50%.

Grayscale Discount or Premium to NAV Chart, YCharts.
Poor demand has seen GBTC trade below its NAV, or the spot bitcoin price.

When there is strong demand for BTC, GBTC has traded above the spot price of BTC, sometimes as much as a 40% higher. This reflects the premium that institutional investors are prepared to pay for exposure. However, over the bear market, holders were prepared to take a significant loss to exit quickly.

GBTC has now almost closed the gap, and is close to fair value. If the trust is converted to an ETF, redemptions will occur more or less in real time, so GBTC will converge with the spot market. This eventuality is now mostly priced in.

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