MicroStrategy (MSTR), a standout bitcoin holding companyhas once again expanded its btc holdings with a substantial purchase of 14,620 bitcoin, for a total of $615.7 million.
The former CEO of the American business intelligence (BI) firm 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 (ETF) on the horizon, MicroStrategy aims to capitalize on the positive impact on the btc price and the company's profitability in the leading cryptocurrency market.
MicroStrategy Shares Soar 337%
According to CNBC bitcoin-bet-produces-300percent-gain-for-investors-in-2023.html” target=”_blank” rel=”nofollow”>reportMicroStrategy shares have seen a notable 337% rise in 2023, making it one of the biggest gainers among U.S. companies valued at $5 billion or more.
This success surpasses the advances 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 capitalization currently stands at $8.5 billion, with a staggering 90% directly linked 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, in 2022, when bitcoin experienced a 64% drop, MicroStrategy shares plummeted 74%. Despite substantial gains made this year, MicroStrategy stock is still below its high levels in 2021, during the cryptocurrency's peak.
The vision of Michael Saylor
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 around $1.1 billion, driven primarily by its software business, which has been shrinking since 2015. Co-founder Michael Saylor, then CEO, saw an opportunity to put the company's idle cash reserves to work, considering low interest rates and the need for diversification.
Saylor's conviction in bitcoin as a digital form of gold led MicroStrategy to prioritize bitcoin purchases over stocks and precious metals. This strategic move exposed investors to bitcoin indirectly through MicroStrategy shares.
Saylor, who became CEO, remains optimistic about the future of bitcoin and expects the bull market to continue into the next year. Despite his growing popularity, Saylor emphasized that bitcoin still represents only a fraction of global capital allocation, with ample room for further growth.
As of December 27, 2023, MicroStrategy's latest purchase adds to its already impressive bitcoin portfolio, bringing total holdings to 189,150 btc.
The company has invested approximately $5.9 billion, with an average purchase price of $31,168 per bitcoin. These strategic acquisitions position MicroStrategy as a major player in the crypto space, aligning its interests with the anticipated growth and adoption of bitcoin.
Current market data shows that bitcoin is trading at $42,900, reflecting a marginal 0.5% increase in the last 24 hours. The cryptocurrency briefly fell below its critical support level of $42,000, but has since regained its position.
The market anticipates the possible approval of bitcoin Spot ETF applications between January 5 and 10, 2024.
This development is very promising for bitcoin as it could push the cryptocurrency's price well beyond $50,000, setting a new yearly high and approaching its all-time peak.
Featured image from Shutterstock, chart from TradingView.com
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