MicroStrategy’s stock has surged 7.8% over the past 24 hours, reaching a 25-year high of $236.12, driven by a recent rise in Bitcoin’s value.
The company’s shares have more than doubled since early September when Bitcoin was still trading below $60,000. On September 6, MicroStrategy stock was priced at around $118. With Bitcoin now trading at approximately $68,000, MicroStrategy’s significant bet on the cryptocurrency appears to be paying off.
MicroStrategy’s transformation into a Bitcoin-centric company
MicroStrategy has taken an increasingly Bitcoin-focused approach under the guidance of co-founder and Executive Chairman Michael Saylor. Saylor recently described Bitcoin as a revolutionary “tech monetary network,” likening it to Google or Facebook for the financial world. He noted that MicroStrategy’s goal is to create a range of Bitcoin-based financial instruments, including options in equity, convertible bonds, fixed income, and preferred shares.
Saylor envisions MicroStrategy evolving into a “Bitcoin bank” that offers investors various risk-adjusted tools to gain exposure to Bitcoin’s price volatility. This pivot to a Bitcoin-centered strategy reflects Saylor’s confidence in the cryptocurrency’s long-term value and potential for growth. According to Saylor, the company’s role has been instrumental in encouraging large financial players to invest in Bitcoin, which he claims would not have happened on such a scale without MicroStrategy’s involvement.
Stock surge driven by Bitcoin’s rally
MicroStrategy’s stock price has closely followed Bitcoin’s upward trajectory. Based on the recent surge, the company currently holds approximately 252,220 Bitcoins, worth over $17 billion. This substantial Bitcoin holding has positioned MicroStrategy as one of the most notable Bitcoin investors in the corporate world. Over the past day, MicroStrategy shares have climbed from $219.03 to $236.12, representing a 7.8% increase. This spike is primarily attributed to Bitcoin’s ongoing rally, which saw its price climb by roughly 20% since early September.
Source: Tradingview
Investors have responded positively to MicroStrategy’s strategy of converting its capital into Bitcoin holdings, viewing it as a high-reward move that amplifies the company’s market potential. Saylor has argued that investing in Bitcoin has the potential to triple returns, further boosting investor confidence in MicroStrategy’s long-term plan. The recent gains reflect growing optimism that MicroStrategy could eventually reach a market capitalization of $1 trillion if Bitcoin’s value continues its upward trend.
Bernstein predicts MSTR stock will reach $290
Asset management firm Bernstein has also expressed confidence in MicroStrategy’s Bitcoin strategy, with analysts predicting that the stock could reach $290 shortly. Bernstein’s report is based on the expectation that Bitcoin could soar to over $1 million per coin by 2033. The analysts, Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia, consider MicroStrategy’s stock an “active asset equity plan,” relying on a blend of equity and long-term convertible debt with conservative leverage.
The Bernstein report highlighted Saylor’s pioneering role in promoting the “Bitcoin treasury model” for corporate balance sheets. This approach has allowed MicroStrategy to serve as a case study for how companies can leverage Bitcoin as a strategic asset. According to Bernstein, MicroStrategy’s model sets a precedent for other companies looking to incorporate cryptocurrency into their financial strategies while managing risk through controlled leverage.
MicroStrategy’s success reflects the growing mainstream acceptance of Bitcoin as a valuable asset, especially among institutional investors. The company’s significant stock rise aligns with its focus on creating financial products linked to Bitcoin, positioning itself as a leader in the emerging digital asset economy.