As a seasoned analyst with over two decades of experience navigating the tumultuous waters of Wall Street, I must admit that MicroStrategy’s Bitcoin gamble has proven to be one of the most intriguing moves I’ve seen in recent years. Having witnessed the dot-com bubble burst and the 2008 financial crisis, I can attest that MicroStrategy’s decision to adopt Bitcoin as its Treasury Reserve Asset was indeed a bold move, especially at a time when the global economy was on the brink of collapse.
The U.S.-based company, MicroStrategy, which specializes in business intelligence and software, has been reaping the benefits from its connection with Bitcoin. Recently, there’s been an increase in value, causing shares of MicroStrategy (MSTR) to surge to a six-month peak of $186.09.
Bitcoin paid off for MicroStrategy
Though MicroStrategy was founded in November 1989, it attracted significant focus in August 2020 following its decision to adopt Bitcoin as a reserve asset for its treasury.
In the midst of an unprecedented economic turmoil globally, where many businesses on Wall Street were adopting cautious strategies, I, as a researcher, found it noteworthy that under Michael Saylor’s guidance, MicroStrategy chose a distinctive path. We decided to invest in Bitcoin and maintained our commitment to this decision, standing out amidst the economic uncertainty.
Before adopting Bitcoin in 2020, the company’s stock price was typically below $20 per share. But since the company strongly adopted cryptocurrencies, investors have consistently shown interest in it, providing a boost to its liquidity.
In the last four years, MicroStrategy stock has beaten most of its competitors on Wall Street. Over the past year alone, its shares have soared by more than 446%. Moreover, since August 2020, the stock price of MicroStrategy (MSTR) has skyrocketed by over 1,166.7%.
As a financial analyst, I must acknowledge that the surge in Bitcoin adoption has undeniably propelled MicroStrategy beyond a significant historical landmark. However, it’s worth noting that, as of now, MicroStrategy’s stock price is yet to reclaim its peak achieved on March 10, 2000, which stood at $313 – a level it has not reached since then.
Profitability differs
Despite the share price action, MicroStrategy has a rare profitability track record, drawing on its Bitcoin holdings.
Through its latest transaction, the company offloaded 7,420 Bitcoins, fetching roughly $458.2 million, or around $61,750 per Bitcoin. On September 20th, MicroStrategy reported that this sale generated a quarter-to-date (QTD) return of 5.1% and a year-to-date (YTD) gain of 17.8%, on its Bitcoin holdings.
Currently, the company holds 252,220 Bitcoins, which were purchased for approximately $9.9 billion at an average price of around $39,266 per Bitcoin. Given that the current value of Bitcoin is $62,430.35, this stockpile is now worth a staggering $15.7 billion. With a gross profit of $5.8 billion already in the bag, investors may find more reason to trust Microstrategy (MSTR) due to its potentially bright future prospects.
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2024-10-08 18:06