As the crypto market continues to soar, one company stands out as the biggest beneficiary of this rally: MicroStrategy (MSTR). The business intelligence firm has accumulated more than 122,000 bitcoins since August 2020, making it the largest corporate holder of the digital asset.
With bitcoin’s price reaching a new all-time high of nearly $53,000 on Friday, MicroStrategy’s bitcoin stash is now worth over $10 billion, according to CoinGecko. This means that the company has made a staggering profit of more than $4 billion in less than two years, as it bought most of its bitcoins at an average price of around $26,000.
MicroStrategy’s bold bet on bitcoin has paid off handsomely, as the company has seen its share price surge by more than 600% since it announced its first bitcoin purchase in August 2020. The company’s market capitalization has also increased from around $1.3 billion to over $9 billion in the same period, making it one of the best-performing stocks in the Nasdaq Composite Index.
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According to Bitcoin Treasuries, a website that tracks the bitcoin holdings of public and private companies, there are currently 43 entities that own a total of 1.7 million bitcoins, worth over $90 billion at current prices. Some of the notable names include Tesla (TSLA), Square (SQ), Galaxy Digital (GLXY), and Twitter (TWTR).
However, not everyone is convinced by MicroStrategy’s aggressive approach to bitcoin. Some analysts have warned that the company is exposing itself to too much risk and volatility by putting most of its cash reserves into a single asset class. They have also questioned the sustainability and profitability of MicroStrategy’s core business, which provides software solutions for data analytics and cloud computing.
Moreover, some regulators have expressed concerns about the accounting and disclosure practices of companies that hold large amounts of cryptocurrencies on their balance sheets.
Despite these challenges, MicroStrategy shows no signs of slowing down its bitcoin buying spree. The company recently raised $1 billion through a convertible bond offering, which it plans to use to acquire more bitcoins.
It also announced that it will pay its board of directors in bitcoin instead of cash, becoming the first publicly traded company to do so. As long as bitcoin’s price keeps rising, MicroStrategy will likely continue to reap the rewards of its visionary investment strategy.
MicroStrategy has been leading the way for publicly traded companies to adopt bitcoin as a reserve asset, a trend that has gained momentum in the wake of the pandemic and the unprecedented monetary stimulus measures. The company believes that bitcoin is a superior store of value than fiat currencies, and that it can provide protection against inflation and currency devaluation.
The company’s CEO, Michael Saylor, has been a vocal advocate of bitcoin, and has influenced other prominent figures and institutions to consider investing in the digital asset. He has also hosted educational events and webinars to share his views and insights on bitcoin with the public.
MicroStrategy’s bitcoin buying spree shows no signs of slowing down, as the company continues to allocate more of its cash and debt proceeds to the cryptocurrency. The company has said it intends to acquire more bitcoins over time, subject to market conditions and business needs. It has also pledged to hold its bitcoins for the long term, and not to sell them unless necessary.