Key Points
- MicroStrategy’s substantial Bitcoin purchases have significantly boosted the company’s stock market performance.
- The company’s strategy of adopting Bitcoin as a strategic reserve asset is influencing other companies and nation-states.
MicroStrategy Inc., a firm specializing in enterprise analytics and mobility software, has seen a significant boost in its stock market performance over the past three months, largely thanks to the impressive performance of Bitcoin.
As a well-known holder of Bitcoin, MicroStrategy’s stock market has surged over 500 percent year-to-date (YTD), trading above $375 during a mid-New York session on Wednesday.
Global Interest in MicroStrategy
The company, valued at $83.9 billion, has drawn investors worldwide, including European central banks. Its undeniable success over the past year has prompted several other companies globally to consider adopting Bitcoin as a strategic reserve asset.
Furthermore, several nation-states, led by the United States, are gearing up to adopt Bitcoin as a strategic reserve asset to combat the looming debt crisis.
MicroStrategy’s Record Bitcoin Purchases
MicroStrategy raised $13.5 billion in November and acquired 149,880 Bitcoins by the end of the month, according to a post by Michael Saylor.
The record-breaking Bitcoin acquisition follows the company’s ambitious plan to raise $42 billion over the next three years to bolster its Bitcoin strategy.
The company bought Bitcoins at an average price of around $90,231, yielding a net benefit of 97,500 BTC for shareholders by the end of the month. Institutional investors seeking to diversify into the cryptocurrency industry have shown overwhelming support for the company.
MicroStrategy is committed to holding its Bitcoin for the long term, with plans to become the largest Bitcoin bank. On December 2, the company purchased an additional 15,400 Bitcoins for about $1.5 billion. As a result, MicroStrategy now holds 402,100 Bitcoin, yielding a 63 percent BTC yield YTD.
However, the company’s success has been criticized by Peter Schiff, the chief economist at Europac and Schiffgold. He noted that MSTR shareholders have been dealing with ongoing stock market dilution and warned that the next Bitcoin bear market could leave the company and its shareholders in a precarious position.
Market Impact
The price of Bitcoin has performed exceptionally well over the past year, driven in part by Saylor’s periodic purchases. The leading cryptocurrency has been hovering around $96k for the past two weeks following a significant rally in early November.
According to on-chain data analysis, 400 new Bitcoin whales, holding between 100 and 10k BTCs, have joined the network in the past two weeks. As a result, the rally beyond $100k is expected to resume shortly, mainly driven by strong fundamentals.
