MicroStrategy (MSTR), a prominent one Bitcoin holding companyhas once again expanded its BTC holdings with a substantial purchase of 14,620 Bitcoin, amounting to a staggering $615.7 million.
The former CEO of the American business intelligence (BI) company announced the acquisition, highlighting the company’s continued confidence in Bitcoin’s long-term potential.
With the possible approval of Bitcoin spot exchange traded funds (ETFs) on the horizon, MicroStrategy aims to capitalize on the positive impact on the price of BTC and the company’s profitability in the leading cryptocurrency market.
MicroStrategy Shares Soar 337%
According to a CNBC reportMicroStrategy shares have seen a remarkable 337% increase in 2023, making it one of the biggest gainers among U.S. companies valued at $5 billion or more.
This success surpasses the rallies of industry giants such as Nvidia and Meta. Unlike its tech peers, MicroStrategy’s appeal to investors comes primarily from its Bitcoin holdings.
MicroStrategy’s market cap currently stands at $8.5 billion, with as much as 90% directly tied to its Bitcoin holdings. The company’s share price closely reflects the performance of Bitcoin, with significant fluctuations in response to the cryptocurrency’s price movements.
According to the report, MicroStrategy’s stock plummeted 74% in 2022, when Bitcoin saw a 64% decline. Despite the substantial gains made this year, MicroStrategy shares are still below their peak levels in 2021, during the cryptocurrency’s peak.
Michael Saylor’s vision
MicroStrategy’s decision to invest in Bitcoin dates back to July 2020, when the company recognized the potential of alternative assets, including digital currencies.
At the time, MicroStrategy had a market capitalization of about $1.1 billion, driven mainly by its software business, which has shrunk since 2015. Co-founder Michael Saylor, then CEO, saw an opportunity to put the company’s unused cash reserves to work, given low interest rates and the need for diversification.
Saylors belief in Bitcoin as a digital form of gold prompted MicroStrategy to prioritize Bitcoin purchases over stocks and precious metals. This strategic move indirectly exposed investors to Bitcoin through MicroStrategy’s stock.
Saylor, who transitioned to executive chairman, remains optimistic about Bitcoin’s future and expects the bull market to continue in the coming year. Despite the growing popularity, Saylor emphasizes that Bitcoin still represents only a fraction of the global capital allocation, with plenty of room for further growth.
As of December 27, 2023, MicroStrategy’s latest purchase adds to its already impressive Bitcoin portfolio, bringing its total holdings to 189,150 BTC.
The company has invested approximately $5.9 billion, with an average purchase price of €5.9 billion $31,168 per Bitcoin. These strategic acquisitions position MicroStrategy as a major player in the crypto space, aligning its interests with Bitcoin’s expected growth and adoption.
Current market data shows Bitcoin trading at $42,900, reflecting a marginal increase of 0.5% in the past 24 hours. The cryptocurrency briefly fell below the critical support level at $42,000, but has since regained its position.
The market is anticipating the possible approval of Bitcoin Spot ETF applications between January 5 and January 10, 2024.
This development holds great promise for Bitcoin as it could push the cryptocurrency’s price well above $50,000, setting a new annual high and moving closer to its historic peak.
Featured image from Shutterstock, chart from TradingView.com
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