- MicroStrategy’s share price outperforms leading assets.
- Precious metals and bonds fare poorly.
- MicroStrategy’s Bitcoin strategy is paying off.
MicroStrategy stunned the TradFi world in August 2020 by becoming the first publicly listed company to buy Bitcoin. Despite volatile market moves since then, MicroStrategy has continued to add BTC to its balance sheet, amassing a fortune in the process.
Thanks to this bold gamble and the recent turn in the crypto market, MicroStrategy’s (MSTR) share price has rallied 466% since August 2020 to outperform leading assets, including Bitcoin.
Bitcoin Gamble Pays Off
MicroStrategy chair Michael Saylor recently posted a chart of MSTR showcasing MSTR’s impressive 466% growth, surpassing prominent assets, including the S&P 500, since the company’s adoption of Bitcoin as a treasury asset.
The chart showed Bitcoin, the S&P500, and the Nasdaq up 333%, 49%, and 44% over the same period. While gold, silver, and bonds fell 1%, 19%, and 20%, respectively.
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Despite early skepticism surrounding MicroStrategy’s Bitcoin strategy, particularly during Saylor’s initial announcement and subsequent significant BTC market downturns, Q4 2023 has seen the market turn, validating Saylor’s call to bulk buy Bitcoin since August 2020.
MicroStrategy Sits on BTC Fortune
To date, MicroStrategy has executed 35 bulk Bitcoin buys, acquiring a 190,000 BTC portfolio at an average acquisition cost of $31,465. With the current Bitcoin price, MicroStrategy’s gamble has paid off handsomely, yielding a substantial unrealized gain of $3.8 billion.
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Saylor recently revealed that MicroStrategy will pivot to become a Bitcoin development company. The company chair explained that this would allow MicroStrategy to tap capital markets better to buy more Bitcoin and “promote the Bitcoin network, lock up the Bitcoin forever, and build the entire ecosystem.”
However, as a reminder of the dangers of crypto investing, Saylor stepped down as MicroStrategy CEO in August 2022 while staying on as the executive chair. This came when MicroStrategy declared a $1 billion second-quarter loss, following a $918 million impairment write-down on the dwindling value of its Bitcoin holdings. BTC saw a 74% drawdown between the November 2021 market top and its lowest June 2022 price.
On the Flipside
- Despite MSTR‘s strong stock performance since August 2020, it is still down 78% from its $3,130 ATH in June 2000.
- The success of MicroStrategy‘s BTC strategy has validated the BTC institutional adoption narrative.
- All markets are cyclical, and how a corporate Bitcoin strategy will fare when the inevitable bear market returns is unclear.
Why This Matters
MicroStrategy’s staggering 466% share price rally demonstrates the tremendous value generated by forward-thinking crypto adoption. As the first public company to implement a Bitcoin treasury strategy, MicroStrategy has pioneered what may become standard corporate practice.
Read about MicroStrategy upping its Bitcoin commitment here:
Saylor Clarifies MicroStrategy’s New Strategy- Becoming more BTC-Friendly
Find out more about African’s preference for USD stablecoin over BTC here:
Bitcoin Lightning Network Falls Flat in Africa
