MicroStrategy (NASDAQ:MSTR) is an American company known for its business intelligence and data management software. It was established in 1989, and over the years, it has emerged as a frontrunner in its field. Recently, MicroStrategy stock has surged, catching the eye of investors. The reason for this growth is the company’s bold strategy of investing in cryptocurrencies (particularly in Bitcoin).
In August 2020, MicroStrategy made headlines by announcing a $250 million investment in Bitcoin. Since then, it has upped the ante, acquiring an additional $425 million and later, a staggering $15 billion worth of Bitcoin. This strategic pivot towards cryptocurrencies has piqued investor interest, with many recognizing MicroStrategy’s savvy grasp of the market and its potential for growth.
On March 26, the company’s market capitalization reached a new historical high of $31.85 billion. Fueling this surge was MicroStrategy’s recent purchase of 9245 BTC on March 19, totaling around $623 million. With a Bitcoin portfolio comprising over 214,246 BTC (equivalent to more than 1% of all Bitcoins currently in circulation), MicroStrategy’s aggressive investment approach has paid off handsomely. The company’s shares significantly increased their value and updated the historical maximum twice in March alone. Investors no longer view MicroStrategy solely as a software developer but also as a cryptocurrency holding company, which adds allure to its shares.
Maintaining support levels is crucial for sustaining this growth trajectory. The previous all-time high (ATH) of $1,800 serves as a critical benchmark. A breach below this level could trigger a rapid decline, and the intermediate support of $1600 won’t be able to stop it. In this case, there’s a possibility of testing the $1300 mark before stabilizing within a horizontal channel between $1,800 and $1,900. However, future announcements of Bitcoin purchases could inject fresh momentum into MicroStrategy’s stock.
So, why did MicroStrategy decide to invest in cryptocurrency? The main reason was the company’s desire to diversify its investment portfolio and hedge against inflation. Bitcoin’s decentralized nature, immune to central bank interventions and government regulators, provides a safeguard against economic upheaval.
The company’s prospects look promising. Its investment strategy underscores its willingness to embrace technological shifts and risk — as Bitcoin gains traction as an alternative asset, MicroStrategy stands to benefit. With its investment strategy yielding positive outcomes thus far, the company appears poised for continued success in both the cryptocurrency and business intelligence spheres.