TLDR
- Microstrategy’s stock (MSTR) has surged 185% in 2024, outpacing Bitcoin’s 47% increase
- MSTR shares have risen 988% since 1998, reaching $191 per share
- Microstrategy’s Bitcoin holdings are now valued at $15.61 billion
- Other companies like Marathon Digital Holdings (MARA) and Japan’s Metaplanet Inc. are adopting similar Bitcoin reserve strategies
- Microstrategy’s stock trades at a premium to its Bitcoin holdings due to factors like leveraged exposure and accessibility to traditional finance investors
Microstrategy, a business intelligence firm founded by Michael Saylor in 1989, has seen its stock price skyrocket in 2024, outpacing even the impressive gains of Bitcoin.
The company’s shares, traded under the ticker MSTR on the Nasdaq, have climbed an astounding 185% since January, while Bitcoin itself has increased by 47% during the same period.
This remarkable performance is part of a longer trend for Microstrategy. Since its initial public offering in 1998, when shares were priced at $18, MSTR has surged by 988% to reach $191 per share.
However, the company’s stock price remained relatively stable, staying below $20 per share for two decades from October 2000 to September 2020.
The turning point for Microstrategy came during the Bitcoin bull run of 2021 when the company adopted a bold strategy of acquiring and holding large amounts of the cryptocurrency as a reserve asset.
This move caught the attention of investors and crypto enthusiasts alike, leading to a significant boost in the company’s stock price.
Currently, Microstrategy’s Bitcoin holdings are valued at $15.61 billion, representing a 57% appreciation against the U.S. dollar. Interestingly, the company’s stock is trading at a premium compared to the value of its Bitcoin reserves.
This premium is attributed to several factors, including the stock offering leveraged exposure to Bitcoin, the potential for option strategies, and its accessibility to traditional finance investors who may not be comfortable directly investing in cryptocurrencies.
The success of Microstrategy’s Bitcoin strategy has not gone unnoticed. Other companies are beginning to follow suit, adopting similar approaches to cryptocurrency investment.
Marathon Digital Holdings (MARA), a crypto mining firm, has seen its shares jump 860% over the last five years and 107% in the past 12 months.
Recently, MARA has chosen to accumulate Bitcoin for its reserves and hold onto the Bitcoin it mines instead of selling it immediately.
In Japan, Metaplanet Inc., listed on the Tokyo Stock Exchange, has also embraced Microstrategy’s Bitcoin-buying strategy.
The results have been similarly impressive, with Metaplanet’s shares surging 397% over the past 12 months and increasing by more than 452% year-to-date.
The company recently added 108.786 Bitcoin to its reserves for $6.7 million, bringing its total holdings to 639.503 Bitcoin, now valued at $40.36 million.
It’s worth noting that while Microstrategy’s stock has outperformed Bitcoin this year, not all crypto-related stocks have fared as well. Coinbase (COIN), a major cryptocurrency exchange, has experienced a 4.4% decline for the year and has dropped 34% over the last six months.
The divergence in performance between Microstrategy’s stock and Bitcoin itself, as well as other crypto-related stocks, highlights the complex and often unpredictable nature of investments in the cryptocurrency space.
While Microstrategy’s strategy of holding large Bitcoin reserves has proven successful so far, it’s important to remember that past performance does not guarantee future results.
