Investors have reaped substantial profits from MicroStrategy’s shares, which have soared 317% this year thanks to the firm’s large bet on Bitcoin.
Thanks in large part to its massive wager on Bitcoin, business analytics and software company MicroStrategy is going from strength to strength. In addition, with the recovery of crypto markets this year, investors have seen massive gains in the firm’s shares.
One of the most successful American firms with a market cap of $5 billion or more this year has been MicroStrategy.
According to CNBC on December 26, “Bitcoin is almost entirely responsible for MicroStrategy’s investor appeal.” This is in contrast to its IT contemporaries, who base their stock values on revenue growth and market share increases.
Not to mention that Bitcoin’s gain of 156% this year pales in comparison to the 317% spike in MicroStrategy shares. The market watchdog MarketWatch reports that on December 26 after-hours, MSTR was trading at $605.
Its performance has even surpassed that of industry heavyweights like Google, Apple, Microsoft, Nvidia, and Meta.
The success of the company is due to BTC. It started purchasing the cryptocurrency in the middle of 2020 and has accumulated over 174,530 BTC since then. With an estimated $7.36 billion worth of Bitcoin, this is the biggest corporate hoard ever.
The source cited stock expert Joseph Vafi, who said, “It’s really Bitcoin,” and went on to say, “Nothing else is unhealthy or underperforming; they aren’t ignoring it either. As far as software goes, it’s at the top of its game. However, it’s essentially not a concern of ours.”
Plus, with a market valuation of $8.5 billion, MicroStrategy’s Bitcoin holdings account for 86% of its value. Michael Saylor, the former CEO, came up with a method for investors to get exposure to Bitcoin without actually buying it.
Then Vafi went on to call Saylor “a kind of visionary,” and finally: “He seized the chance to launch this Bitcoin treasury experiment by capitalizing on their large cash reserves and spotless financial records. Plus, it was successful, so they’re still going in that direction.”
But MicroStrategy may face competition from a number of new spot Bitcoin ETFs in January if they all receive the go-ahead.
However, according to Vafi, this is excellent news for MicroStrategy since ETFs will drive up the price of Bitcoin.
The possible adoption of a spot Bitcoin ETF might be the most significant movement on Wall Street in 30 years, according to Saylor’s prediction last week.
Also, the company isn’t planning to cut down on its Bitcoin accumulation anytime soon. With an extra 16,130 BTC for over $593 million, it made its biggest acquisition since 2021 in November.
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