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MicroStrategy’s Bitcoin Bet Pays Off as Stock Hits Near-Record High

MicroStrategy, a leading business intelligence software company co-founded by Michael Saylor, has seen its stock price skyrocket in recent months, thanks to its massive investment in Bitcoin.

The company, which is the largest corporate holder of Bitcoin, has outperformed the major US stock market indexes by a wide margin, as investors flock to its shares amid the ongoing crypto bull run.

MSTR Beats S&P 500, Dow Jones, and Nasdaq

Since the beginning of the year, the US financial markets have been on a positive trend, with the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite all posting gains.

The S&P 500, which tracks the performance of the 500 largest publicly traded companies in the US, has risen by more than 8% and reached an all-time high of over 5,100.

The Dow Jones, which measures the performance of 30 blue-chip companies, has also increased by 3.6% year-to-date as of Friday’s closing price.

The Nasdaq, which follows the biggest technology firms, has grown by just over 1% in the same period.

However, none of these indexes can match the impressive performance of MicroStrategy, which is listed on the Nasdaq. The company’s stock price has soared by more than 50% since the start of the year and surpassed $1,000 at the end of last week. As a result, MicroStrategy’s stock is close to its all-time high of $1,300, which it achieved in February 2021.

Source: Yahoo Finance

MicroStrategy’s Bitcoin Strategy

The main reason behind MicroStrategy’s stellar performance is its bold and unprecedented strategy of investing in Bitcoin as a hedge against inflation and currency devaluation.

The company started buying Bitcoin in August 2020, when it announced that it had purchased 21,454 BTC for $250 million, making it the first publicly traded company to adopt Bitcoin as its primary treasury reserve asset.

Since then, MicroStrategy has continued to buy more Bitcoin, using various methods such as issuing convertible senior notes, selling equity, and using its excess cash flow. The company has also encouraged its employees and board members to receive part of their compensation in Bitcoin.

As of the latest update, MicroStrategy holds 193,000 BTC, worth about $12 billion at current prices. The company has spent just over $6 billion to acquire this digital fortune, meaning that it has made a massive unrealized profit of $6 billion. In other words, the company’s Bitcoin position has doubled in value in just over three years, demonstrating the power of dollar-cost-averaging.

MicroStrategy’s Stock Moves with Bitcoin

Being the company with the largest direct exposure to Bitcoin, it is not surprising that MicroStrategy’s stock price moves in tandem with the price of the leading cryptocurrency.

Bitcoin has been on a strong uptrend since late 2020, reaching new highs almost every week. The digital asset has gained more than 300% in the past year and more than 70% in the past two months. It recently broke above $60,000 for the first time, bringing its market capitalization to over $1 trillion.

MicroStrategy’s stock price has followed a similar trajectory, as investors see it as a proxy for Bitcoin. The company’s market capitalization has also increased significantly, reaching over $10 billion as of Friday’s close.

MicroStrategy’s CEO, Michael Saylor, has been one of the most vocal and influential advocates of Bitcoin, frequently appearing on media outlets and social platforms to promote the benefits of the cryptocurrency. He has also hosted events and webinars to educate other corporate executives and investors on how to adopt Bitcoin as a store of value and a medium of exchange.

Saylor has stated that he believes Bitcoin is the most powerful and disruptive technology of our time, and that it will eventually become the dominant monetary network in the world. He has also said that he plans to hold Bitcoin for the long term, regardless of the price fluctuations.

MicroStrategy’s Bitcoin bet has paid off handsomely so far, as the company has reaped the rewards of the crypto boom. However, the company also faces significant risks, as Bitcoin is known for its high volatility and unpredictability. If the crypto market crashes, MicroStrategy’s stock price could also suffer a major blow.

Nevertheless, MicroStrategy has shown that it is not afraid to take calculated risks and innovate in the fast-changing world of technology and finance. The company has set an example for other corporations and institutions that are interested in exploring the potential of Bitcoin and other cryptocurrencies.

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