MicroStrategy Poised to Overtake Grayscale as Bitcoin Holdings Surge

MicroStrategy is about to surpass Grayscale in bitcoin holdings. This company has been smartly using capital markets to raise funds for buying more bitcoin. Meanwhile, Grayscale has seen a significant outflow of tokens since the U.S. spot ETFs launched in January.

As of September 20, MicroStrategy (MSTR) holds a total of 252,220 bitcoins. That’s about 1.2% of the total supply, which is capped at 21 million. On the other hand, Grayscale, which used to have over 620,000 bitcoins in its Bitcoin Trust (GBTC), now holds just over 254,000 bitcoins. These are split between GBTC and its new, lower-fee Bitcoin Mini Trust (BTC).

Recently, MicroStrategy raised over $1 billion in capital that it hasn’t yet deployed. It’s likely that these funds will be used to buy more bitcoin, which could significantly boost its holdings and put it ahead of Grayscale.

If this happens, MicroStrategy will become the fifth largest holder of bitcoin. It will trail only BlackRock, Binance, Satoshi Nakamoto, and Coinbase. It’s important to note that BlackRock, Binance, and Coinbase manage bitcoin for clients, not for their own accounts.

Under the leadership of former CEO and current Executive Chairman Michael Saylor, MicroStrategy started buying bitcoin with cash from its balance sheet back in August 2020. Since then, the company has actively raised billions to expand its bitcoin stash. The average purchase price for MicroStrategy is just over $39,000, while bitcoin is currently priced around $64,000. So, its total bitcoin holdings are valued at about $16 billion.

On the flip side, Grayscale, which was a pioneer in providing public access to bitcoin, decided to keep its GBTC fee at a relatively high 1.50%. This is more than 100 basis points above its competitors. After converting to a spot ETF, this choice has led to a quick decline in its assets. However, the Bitcoin Mini Trust, which features a much lower fee of 0.15%, has managed to grow its assets. As of last week, it held just 33,753 bitcoins.