MicroStrategy rebrands to Strategy, buys $20B of Bitcoin

MicroStrategy, the top corporate holder of the world’s first cryptocurrency Bitcoin (BTC), just rebranded to Strategy and bought $20B worth of BTC.

Strategy announced its rebrand in a Feb. 5 press release. The firm now features the Bitcoin logo as part of its name and changed its official color to Bitcoin orange — a new website and merchandise section are also already online. The firm’s president and CEO Phong Le said:

“Strategy is innovating in the two most transformative technologies of the twenty-first century — Bitcoin and artificial intelligence. Our new name powerfully and simply conveys the universal and global appeal of our company, and the value we bring to the strategies of our shareholders, customers, partners, and employees.”

Strategy is a publicly traded business intelligence company founded as MicroStrategy in 1989. In 2020, it pivoted to acquire as much Bitcoin as possible. The company now holds well over 1% of all Bitcoin that will ever exist and is well underway in its pursuit of 2%.

Recent reports indicated that MicroStrategy may have to pay taxes on its holdings despite never selling any. In accordance with the Inflation Reduction Act of 2022, MicroStrategy qualifies for a 15% tax rate based on the adjusted version of the company’s earnings.

This would likely force the company to sell a part of its very significant stake in Bitcoin, which could potentially lead to lower prices. Still, he United States Internal Revenue Service (IRS) may decide to create an exemption specifically for Bitcoin holdings under Trump’s administration as requested by MicroStrategy and U.S. crypto exchange Coinbase.

Still, Strategy’s Q4 earnings report marks a 3% year-on-year fall that missed analyst estimates by about $2 million with a revenue of $120.7 million. The company’s expenses increased by nearly 700% compared to the previous year, reaching $1.1 billion.

Strategy continues working towards its “21/21 Plan” — hoping to reach $42 billion in capital over the next three years, split equity and fixed-income securities — with the sole objective of siphoning all of it into Bitcoin. The firm is on a good track to achieve this goal, having already gotten its hands on $20 billion.

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