Summary
- BlackRock’s 5% position ties it to Strategy’s $46.4 billion Bitcoin holdings.
- The strategy’s $2 billion note enhances Bitcoin purchases, in line with BlackRock’s crypto drive.
- BlackRock may lead Strategy’s Bitcoin treasury strategy.
- A strategy might be BlackRock’s instrument for shaping institutional BTC acceptance.
Strategy, formerly known as MicroStrategy, changed its name on February 5, 2025, to reflect its emphasis on Bitcoin. It has been purchasing Bitcoin since 2020 and now holds 478,740 BTC, valued at $46.4 billion as of February 10, 2025.
Despite a $ 670 million financial loss in Q4 2024, as revealed on February 5, the company purchased 218,887 BTC, its most active time yet. BlackRock, which manages $11.6 trillion in assets, also controls the iShares Bitcoin Trust ETF and boosted its strategy investment, indicating corporate interest in cryptocurrency.
Strategy’s Aggressive Bitcoin accumulation
The strategy was relaunched in February to showcase its Bitcoin emphasis. Since 2020, under CEO Michael Saylor, it has acquired 478,740 BTC, worth $46.4 billion based on a Bitcoin price of $97,567, according to the latest statistics.
Its Q4 2024 profits, as published in public records, showed a net loss of $670 million. However, it acquired 218,887 BTC, marking its most aggressive accumulation, according to Strategy’s records.
Strategy’s $2 billion issue, announced in a press release on February 20th, 2025, included senior convertible notes with a 0% coupon due March 1, 2030.
According to the press release, each $1,000 note converts to 2.3072 shares at $433.43 a share, representing a 35% premium over the current market price of approximately $321 as computed from the premium.
Conversion terms fluctuate with market circumstances, and it targets qualified institutional investors, with an option for an additional $300 million within five business days, according to strategy releases.
BlackRock’s 5% strategic stake: A vote of confidence?
BlackRock, which manages $11.6 trillion, upped its strategy investment to 5% on February 7, 2025, according to SEC filings. This came after a 2.8% stock increase, according to TradingView.
BlackRock’s iShares Bitcoin Trust ETF complements this move by providing direct crypto exposure, whilst its strategy position gives indirect access through business holdings. This dual strategy, as indicated in market evaluations, indicates strategic diversification.
The market responded enthusiastically, with Strategy’s shares jumping 2.8% on February 7, 2025, according to TradingView data. SaylorTracker calculates unrealized profits of more than $15 billion, with a 49% return on Bitcoin investments.
Furthermore, 12 US states own $330 million in strategy shares, showing institutional interest, according to public records until February 20, 2025. California, Florida, Wisconsin, and North Carolina are among the states with the highest levels of investment in Strategy stock.
Looming Tax Dilemma
The Coin Republic recently revealed MicroStrategy’s impending tax fight over its Bitcoin holdings. The company’s $47 billion in holdings, including $15 billion in unrealized gains, might result in a significant charge under the United States Corporation Alternative Minimum Tax (CAMT).
This year’s new FASB standards compel corporations to report cryptocurrency at fair value, which increased MicroStrategy’s retained profits by up to $12.8 billion and deferred tax liabilities by $4 billion.
This change links Bitcoin directly to financial statements, increasing sensitivity to regulation and market fluctuations. Meanwhile, the IRS intends to monitor cryptocurrency trading on exchanges beginning in 2025, indicating stricter control.
Also Read: Blackrock Advocates for an In-Kind Redemption Model in the Ishares Bitcoin Trust ETF
Nasdaq has submitted a rule modification to the Securities and Exchange Commission (SEC) to permit in-kind redemption for BlackRock’s iShares Bitcoin Trust (IBIT). BlackRock, an American investment management company, is advocating for a novel redemption mechanism for its ETF product, the iShares Bitcoin Trust (IBIT). The Nasdaq Stock Market LLC, its trading venue, has submitted an application to the United States Securities and Exchange Commission (SEC) for the in-kind redemption model. This is particularly noteworthy…[Read More]
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