Experts estimate MicroStrategy’s gains from investing in Ethereum instead of Bitcoin

Experts from Blockchain Center calculated that MicroStrategy could have earned $1.6 billion instead of losing $1.3 billion if it had invested in Ethereum instead of Bitcoin, according to Blockchain Center.

Led by Michael Saylor, the firm in August 2020 for the first time shifted part of its reserves into digital gold. The business analytics software company purchased 21 454 BTC (~$250 million at the time of the deal).

After that MicroStrategy began following the investment approach approved by the Chief Strategy Officer for investing in Bitcoin not only through equity but also by attracting debt financing.

The most recent purchase of 301 BTC for $6 million was made in September 2022. The volume of its crypto reserves reached 130 000 BTC, invested about $3.98 billion. The current value of the assets stands at around $2.66 billion.

The Blockchain Center service uses the slogan on its MicroStrategy page: the phrase of Saylor’s ardent supporter of the first cryptocurrency:

There is no second best.

There is no second best. #Bitcoin

— Michael Saylor⚡️ (@saylor) October 8, 2021

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However, by their calculations, if the reserves had been invested in Ethereum instead of Bitcoin, they would now amount to 3,781,691 ETH ($5.9 billion), including staking income.

Even now, if it had converted the digital gold into the second-largest cryptocurrency, the firm would earn $133 million a year in passive income on the assets.

“MicroStrategy has never seen such a large operating profit,” the experts emphasized.

Arcane Crypto’s chief investment officer Eric Wall drew attention to the data. In the replies to his tweet, users noted that not only would the Ethereum allocation have been more profitable than Bitcoin.

Independent developer Udi Wertheimer, for example, pointed to Solana and Dogecoin.

and it’s not just saylor

if you DCA’d into bitcoin over the last couple of years you’re down horrendous, even if you started at $4,000

if you DCA’d anything else. — ETH, SOL, DOGE… you’re up by a lot

can’t imagine why the plebs are so mad

— Udi Wertheimer (@udiWertheimer) November 4, 2022

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The SOL price rose from $4.44 on August 31, 2020 to $30.83 (up 594%), according to CoiGecko. DOGE during this period rose from $0.003 to nearly $0.13 — up 4,233%.

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During that period, both assets climbed to their own peaks, with Dogecoin reaching $0.73 and Solana $260.

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The authors of Blockchain Center acknowledged that their retrospective analysis is hypothetical.

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“Saylor’s decision to convert cash into Bitcoin could have been (and still could be) the greatest decision of all time. But saying ‘There is no second-best crypto asset’ was, after all, a stretch, given the data,” the experts concluded.

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In August, Saylor left the post as MicroStrategy’s Chief Executive Officer and became executive chairman.

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He described the decision to move reserves into the leading cryptocurrency as correct and justified despite the market downturn.

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