Record-Breaking $1.1B Bitcoin Purchase

Record-Breaking $1.1B Bitcoin Purchase

MicroStrategy (MSTR) has made its largest bitcoin purchase in over a month, acquiring another $1.1 billion worth of bitcoin (BTC), marking its 11th consecutive week of buying. The company added 11,000 BTC to its holdings, bringing its total to 461,000 bitcoin, valued at approximately $47 billion at current prices. This purchase was financed through the issuance and sale of shares, continuing the company’s strategy of leveraging equity and debt to build its bitcoin reserves.

MicroStrategy had previously announced plans to raise $42 billion over three years to bolster its bitcoin holdings, expanding that target by $2 billion earlier this year. A key shareholder vote is set to decide whether the company will increase authorized shares of class A common stock to 10.3 billion from 330 million and preferred stock to 1 billion from 5 million. If approved, this would enhance its capacity for further bitcoin acquisitions.

The company’s aggressive bitcoin strategy has faced criticism for its reliance on debt and equity issuance, raising concerns among some investors. However, it has influenced other firms like Marathon Digital (MARA) to adopt similar strategies. Despite a 7% dip in early trading, MicroStrategy shares remain up more than 690% over the past year.

Stargate AI Project: $500B Ambition

SoftBank CEO Masayoshi Son will lead the $500 billion Stargate Project alongside OpenAI’s Sam Altman and Oracle’s Larry Ellison, as announced by President Trump on Tuesday. The groundbreaking initiative focuses on bolstering U.S. artificial intelligence (AI) infrastructure, creating an estimated 100,000 jobs.

Initial funding begins at $100 billion, with a four-year goal of $500 billion. The project’s key partners include SoftBank, OpenAI, MGX, Nvidia, Microsoft, and Oracle, with Son chairing Stargate and OpenAI overseeing operations. Ellison highlighted AI’s transformative potential, citing advancements in early cancer detection and personalized vaccines.

Ten massive data centers, each spanning half a million square feet, are already under construction in Texas, with plans to expand to 20. Trump emphasized the economic and technological significance of the project, which will be supported by executive orders to ensure energy availability. Son declared this the dawn of a new AI-driven golden age, aiming to solve humanity’s toughest challenges.

UK Risks Economic 'Debt Spiral'

Billionaire investor Ray Dalio has issued a stark warning, suggesting the U.K. risks entering a “debt death spiral” unless immediate action is taken to address its rising borrowing costs. Dalio emphasized the urgent need to cut the budget deficit through tax increases or spending reductions before the cost of borrowing becomes unmanageable.

The U.K.’s 10-year gilt yield reached a 16-year high of 4.9% in December, driven by fears of inflation and substantial government borrowing. The Office for Budget Responsibility projects debt servicing costs to hit £89 billion in 2024/25. Dalio explained, “When borrowing is required to service debt and rising rates exacerbate the cycle, it’s a death spiral.”

With a deficit forecast of 4.8% of GDP for 2025, Dalio advocated reducing it to 3%, mirroring similar concerns for the U.S. Rising borrowing costs have heightened scrutiny on Labour’s fiscal policies, echoing past crises like Liz Truss's 2022 budget.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.