MicroStrategy’s Bitcoin Investment Pays Off
On Black Friday, MicroStrategy (NASDAQ:MSTR) made waves as its stock closed above $500, reaching levels not seen since December 2021, and achieving a market cap of $7.33 billion. This surge in stock price can be attributed to the company’s steadfast approach to holding Bitcoin as a long-term investment.
Holding Bitcoin as a Winning Strategy
MicroStrategy’s decision to hold the leading cryptocurrency has proven to be a lucrative one. Despite starting the year with a quarterly loss, the company saw its stock price double within a month. As one of the largest institutional holders of Bitcoin, MicroStrategy’s founder and chairman, Michael Saylor, began purchasing Bitcoin in August 2020 as a hedge against inflation.
According to Saylor, the future looks promising for the company. In an interview with CNBC, he expressed confidence in the increasing demand for Bitcoin and the contraction of its supply, creating an unprecedented opportunity on Wall Street.
Bitcoin Holdings and Financial Performance
By April, MicroStrategy’s Bitcoin holdings were in the green as the price of Bitcoin surpassed $30,000. The company further increased its holdings by purchasing an additional 1,045 Bitcoin, bringing its total holdings to 140,000 Bitcoin. With this purchase, the average price of the digital asset fell to $29,803 per coin.
Despite a $24 million Bitcoin impairment charge in its second-quarter earnings report, MicroStrategy remained profitable as a company. It continued to add to its Bitcoin holdings, amassing 152,800 coins worth about $4.4 billion. This move paid off, as the stock of companies with Bitcoin exposure outperformed the cryptocurrency itself, which had already seen an 87% increase in value that year.
Continued Bitcoin Purchases
Despite facing a net loss of $143.4 million in its most recent quarterly report, MicroStrategy remained undeterred in its Bitcoin purchases. The company acquired an additional 6,067 Bitcoin for $167 million, bringing its total holdings to approximately 0.75% of Bitcoin’s total circulating supply.
With its bullish approach to Bitcoin and its long-term investment strategy, MicroStrategy is continuing to make waves in the world of cryptocurrency. As the company remains committed to its Bitcoin holdings, its financial performance and stock price continue to reflect the success of this investment approach.
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