"Token accumulation" stocks achieve double gains on the books, HashKey assists listed companies in becoming "Eastern Micro Strategy"

MicroStrategy's "Two Birds with One Stone" Strategy, Stock Price Soars 12 Times with Over $760 Million in Unrealized Gains

In the capital market, some listed companies have chosen to "take a different path."

By making large purchases of one of the world's most appreciating assets, they have gained substantial profits and attracted traditional financial institutions to invest, ultimately achieving dual growth in stock prices and book value. Known as the "King of Coins" in the U.S. stock market, MicroStrategy has achieved remarkable results with this strategy, seeing its stock price increase 12 times.

MicroStrategy's accumulation strategy began in 2020. On August 11, founder Michael Saylor announced that the company "launched a Bitcoin strategy" and had spent $250 million to purchase 21,454 Bitcoins, when the price of Bitcoin was still below $12,000.

MicroStrategy not only used its own funds to buy Bitcoin but also continuously increased its Bitcoin holdings through debt and equity financing transactions.

By February 2021, just six months after their initial Bitcoin purchase, Saylor announced that MicroStrategy's purpose for buying Bitcoin was not only to preserve software sales revenue but also to establish a dedicated Bitcoin department, as Saylor believed that Bitcoin's value would significantly increase over time. By leveraging software sales revenue and borrowing to purchase Bitcoin, MicroStrategy could boost its stock price more quickly and efficiently than traditional investment measures like core business investments, stock buybacks, and acquisitions.

In the nearly four years since, MicroStrategy has issued convertible bonds twice to raise $1.7 billion, conducted multiple stock sales, and issued $500 million in "junk bonds." They even secured approximately $200 million in term loans from banks using Bitcoin as collateral, which was then used to buy more Bitcoin.

On March 5 of this year, MicroStrategy announced another purchase of 12,000 Bitcoins for $821.7 million, marking the company's second-largest transaction since it began buying Bitcoin nearly four years ago. The funds for this purchase came from an $800 million convertible note issuance completed on March 8.

Through its aggressive accumulation strategy, MicroStrategy has become one of the largest holders of Bitcoin globally. According to publicly available data on Bitcoin holdings among listed companies, MicroStrategy holds more Bitcoins than the total of the next nine companies combined.

What was once seen as a "gamble" by industry insiders has proven to be a fruitful strategy after four years of planning by MicroStrategy.

An even smarter move is that in North America, since Bitcoin has not been approved by the U.S. Securities and Exchange Commission as an investment product, formal financial institutions are not allowed to purchase Bitcoin. However, MicroStrategy has become a key target for U.S. institutions betting on Bitcoin amid its significant price increase. For example, from 2023 onwards, institutions like Bank of America and asset management giant Fidelity have begun purchasing large amounts of MicroStrategy's stock, becoming one of the company's top ten shareholders. Investing in MicroStrategy is akin to investing in Bitcoin, making MicroStrategy a darling of capital.

Statistics show that from August 2020 to now, although MicroStrategy's stock price has experienced fluctuations, it has risen from $145 to $1,782, an increase of over 12 times. Particularly since the beginning of this year, MicroStrategy's stock price has surged by as much as 180%. Media reports indicate that the increase in MicroStrategy's stock price has even outpaced the appreciation of the Bitcoins it holds.

As of March 2024, MicroStrategy holds a total of 205,000 Bitcoins, with an acquisition cost of $6.91 billion and an average price of $33,706. Based on a Bitcoin price of $71,000, MicroStrategy's current unrealized gains exceed $760 million. Its founder Saylor, as the largest investor in the company, has seen his personal wealth increase by approximately $700 million following the continuous rise in the company's stock and Bitcoin prices.

In this round of "crypto frenzy," MicroStrategy has become the largest beneficiary among North American listed companies.

Stock Price Quadruples, "Eastern MicroStrategy" Sees Unrealized Gains Exceeding $370 Million

Meanwhile, on the Eastern crypto battlefield, institutions comparable to "MicroStrategy" have emerged.

Recently, Bitcoin has broken new highs, surpassing the $73,000 mark. With the support of the licensed virtual asset exchange HashKey Exchange in Hong Kong, listed companies in Hong Kong have sparked a buying spree for cryptocurrencies, achieving both stock price and revenue gains.

According to public information, a well-known online gaming company has recently authorized its board to continue purchasing cryptocurrencies totaling no more than $100 million, completing its third cryptocurrency "buying spree."

As early as August 2023, the company had used a budget of $5 million to purchase cryptocurrencies (BTC, ETH). With the arrival of the bull market, the scale of the company's cryptocurrency investments has significantly increased. On December 22, 2023, the company announced that a special shareholders' meeting approved the purchase of $100 million in cryptocurrencies with a 91.5% approval rate. This includes plans to purchase $45 million in BTC and $45 million in ETH, with an additional $10 million allocated to USDT and USDC.

Currently, the gaming company has purchased a total of 1,110 Bitcoins at an average price of approximately $41,790. It has also acquired 14,855 Ether at an average price of about $2,777, and purchased around 8 million Tether.

Similar to MicroStrategy, the cryptocurrency market has been on an upward trend, and the company's stock price has risen from HKD 0.55 at the end of last year to over HKD 2, reaching a peak of HKD 2.47 on March 13, a rise of 449%. Based on Bitcoin at $71,000 and Ethereum at $3,900, the company's current unrealized gains exceed $48 million (approximately HKD 374 million), even surpassing its total gross profit of RMB 270 million (approximately HKD 300 million) for the entire year of 2023.

The institution's strategic layout has become a microcosm of the "new paradigm" for listed companies accumulating cryptocurrencies. The inflow and outflow of cryptocurrencies is merely a basic layout in the collaboration between institutions and compliant exchanges.

According to public information, seven Hong Kong-listed companies, including Boyaa Interactive (0434.HK), Lan Kwai Fong Interactive (8267.HK), Shengyang Group (8163.HK), Yangke Group (1460.HK), Hushi Media (1163.HK), New Fire Technology (1611.HK), and Huake Intelligent Investment (1140.HK), have reached cooperation agreements with the licensed exchange HashKey Exchange. Additionally, over ten brokerage firms, including Huayang Securities, Huaxia Fund (Hong Kong), Pandu Financial, Huafu Jianye Securities, Mulan Asset Management, and Haitong Securities, have also partnered with HashKey Exchange.

Moreover, the Ethereum Cancun upgrade has recently been completed, optimizing the performance of the Ethereum Layer 2 network. The market predicts that this will lead to the prosperity and explosion of the Ethereum on-chain gaming ecosystem, NFT ecosystem, DeFi applications, and more. As compliant trading serves as the underlying support, the market is gradually heating up, and the imagination of the application layer is being unlocked. As keen market observers, institutions have already taken action.

Taking Lan Kwai Fong Interactive as an example. At the end of 2023, Lan Kwai Fong Interactive reached a strategic cooperation with HashKey Group to jointly build a Web3 digital entertainment ecosystem. In addition to opening an account on HashKey Exchange and purchasing virtual assets, Lan Kwai Fong Interactive will also collaborate with HashKey Group to support open-source blockchain projects. As a leading interactive entertainment content platform provider, Lan Kwai Fong Interactive aims to provide game developers and players with a higher quality and more convenient blockchain gaming platform. By leveraging Layer 2 network technology, it will achieve a high-performance, low-cost, and secure gaming transaction experience, further promoting the application of blockchain technology in the gaming industry. HashKey Group will utilize innovative technologies such as smart contracts and zero-knowledge proofs to provide technical support for the operation of blockchain infrastructure, promoting the integration of blockchain technology in the digital entertainment field.

In addition, HashKey Group and Lan Kwai Fong Interactive will closely monitor the cutting-edge trends in the digital entertainment economy. Lan Kwai Fong Interactive intends to become an important builder of infrastructure in the Asian Web3 digital entertainment ecosystem, contributing to network security and operational efficiency. Both parties will also explore businesses such as digital payments and stablecoins to provide a more stable and secure trading experience for different groups, including digital art participants and gamers.

As a licensed virtual asset exchange in Hong Kong, HashKey Exchange is recognized for its compliance, capital protection, and platform security services. Boyaa Interactive's investment layout through HashKey Exchange highlights its high trust in the safety and professionalism of the HashKey trading platform.

As its purchasing efforts expand, compliant inflows and outflows will become a necessity for Eastern institutional investors' Web3 layouts. HashKey Exchange will also take on the mission of continuously enriching and enhancing its products to assist more companies in their Web3 transformation.