What Is MicroStrategy (MSTR)? The Bitcoin Treasury Company

Now, however, it’s best known for its aggressive strategy of acquiring Bitcoin for its corporate reserves, with Saylor becoming a key figurehead for the institutional adoption of the asset.

Here’s everything else you need to know about MicroStrategy and its relationship with Bitcoin.

What is MicroStrategy?

Before it added Bitcoin to its balance sheet, MicroStrategy was best known for its business intelligence software solutions, which were designed to help businesses more easily analyze data for improved decision making.

Founded in 1989 by Michael Saylor, MicroStrategy quickly became successful, going public and trading on the NASDAQ in 1998 as MSTR. But just two years later, Saylor and two other top executives at MicroStrategy had to settle a case with the SEC, which alleged that the company had “materially overstated revenues and earnings from the sales of software and information services.”

After a brief spike in its share price in 2000, MSTR traded in a tight range for the next two decades, only beginning to make a major move upwards at the end of 2020—the same year it announced its first Bitcoin purchase.

MicroStrategy’s Bitcoin treasury reserve

In 2020, MicroStrategy made a groundbreaking move: the company adopted Bitcoin as its primary treasury reserve asset. Concerned about the devaluation of the United States dollar and fiat currency due to inflation, Saylor spearheaded the company’s first purchase of $250 million in Bitcoin as a hedge against economic uncertainty.

“This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash,” he said at the time.

The company’s Bitcoin buying strategy has evolved over time and shifted to primarily using the sale of convertible notes to raise funds to buy more Bitcoin. In other words, MicroStrategy utilizes short-term debt raises via convertible notes that allow investors to eventually cash in for MicroStrategy stock. It then uses the funds raised from the sale of the notes to buy Bitcoin.

This strategy has ultimately been adopted by other publicly traded companies like MARA and Riot Platforms. In December, Saylor likened this strategy to the development of Manhattan real estate, telling CNBC that, “Every time Manhattan real estate goes up in value, they issue more debt to develop more real estate.”

As MicroStrategy has become ever more closely intertwined with Bitcoin, the company now refers to itself as the “World’s First and Largest Bitcoin Treasury Company” via its investor relations page.

Michael Saylor, Bitcoin bull

Though Michael Saylor is now one of the loudest voices advocating for Bitcoin, he wasn’t always a Bitcoin bull.

Just seven years before his company adopted the crypto as its main reserve asset, Saylor posted on Twitter that “#Bitcoin days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling.”

Since then, Saylor has done a complete 180°, claiming Bitcoin is the best long-term asset to hold while committing to “buying the top forever,” referring to consistently purchasing the asset at its peak prices—which MicroStrategy continues to do.

In Saylor’s view, that means he might be buying Bitcoin at $13 million, the price target he’s established for the asset over the next 21 years as he expects it to take up a larger percentage of total global capital.

The case against MicroStrategy’s Bitcoin reserve

MicroStrategy’s persistent Bitcoin acquisitions via the sale of debt has faced scrutiny by analysts and media in the space. In November 2024, Robinhood-backed Sherwood Media outlined the “math problem,” with MSTR being worth 3x the amount of BTC that it holds and the potential of forced liquidations in a drawdown.

These ideas have seeped into the wider crypto community as well, with formerly bullish Citron Research taking a short position in November 2024, betting on the share price of MSTR to go down.

Citron’s notes suggest MSTR is “overheated” and no longer required to gain exposure to Bitcoin investments.

If the MSTR share price falls enough, MicroStrategy could be forced to sell Bitcoin to repay more than $4 billion in convertible notes, “effectively reversing its ‘perpetual motion machine’…which would further decrease Bitcoin’s price,” according to Sherwood Media.

The future of MicroStrategy

Other companies have adopted MicroStrategy’s Bitcoin reserve strategy, including Japanese firm Metaplanet and Canadian crypto firm Matador Technologies.

While MicroStrategy has continued its consistent Bitcoin purchases, the firm signaled in October it has no plans on slowing down in the future. At that time, MicroStrategy announced plans to raise up to $42 billion in order to add more of the leading cryptocurrency asset to its balance sheet.

Seeking more though, the firm passed a vote in January 2025 to implement a 30x increase of its Class A common shares, allowing it to add even more Bitcoin than initially planned.

The company, which now owns more than $48 billion worth of Bitcoin, is up more than $17.7 billion on its purchases lifetime according to data from SaylorTracker.

Saylor’s ambitions for MicroStrategy are even grander than adding major Bitcoin reserves to the company’s balance sheet. In October 2024, he outlined his vision for MicroStrategy to evolve into a “Bitcoin bank” with a trillion-dollar valuation, creating capital market instruments tied to Bitcoin that can be offered to investors.

In addition to adding to its own holdings, Saylor and company are now also pitching other major publicly traded companies. In December 2024, he told the Microsoft board they could stand to create $5 trillion in value by adopting Bitcoin. They voted against adding it to their balance sheet…for now.

Editor’s note: This story was originally published on January 8, 2025 and last updated with new details on January 28.