While the broader stock market was sent tumbling on Monday, MicroStrategy soared 6% and continued to make gains into Tuesday morning. The share price of the largest public corporate holder of Bitcoin hit $190 for the first time since March, marking a six-month high.
MicroStrategy stock extended gains on Tuesday nearing $200. The Virginia-based firm holds around $16 billion worth of Bitcoin, making the company a proxy for the cryptocurrency.
Bitcoin prices and MicroStrategy stock often move in tandem. In this case, however, the company’s surge did not coincide with a rise in Bitcoin prices. As the Nasdaq and the S&P 500 fell 1% on Monday, Bitcoin fell too. Within an hour, Bitcoin slid from $64,000 to $62,800, concluding the day at around $63,300. On Tuesday, the currency floated around $62,000 while MicroStrategy hit $198.
The company has continued to acquire Bitcoin. Back in March, the last time MicroStrategy reached $190, its shares had jumped a few weeks after the company announced the purchase of 12,000 Bitcoins. This time, the surge comes almost a month after U.S. Security and Exchange Commission filings revealed that the company acquired an additional 18,300 Bitcoins between August and September, the largest amount of tokens acquired since 2021.
MicroStrategy’s strategy
In 2020, Michael Saylor, MicroStrategy’s former CEO and current executive chairman, made the decision to pivot the company’s business strategy toward investing in large sums of Bitcoin, a currency he had once been skeptical of, to protect the company’s reserves from inflation. Since then, the company has amassed 252,220 bitcoins, about 43% of the company’s market capitalization and 1% of the Bitcoin in existence. Despite the naysayers, Saylor’s business plan has paid off greatly.
After experiencing the drawbacks from holding such a volatile currency, MicroStrategy stock surged 300% in 2023, going from $14 to $63 by the end of the year. In 2024, the company continued to see gains as traditional financial institutions moved into the crypto space with the approval of spot Bitcoin exchange-traded funds, pushing the stock price to highs in March.
MicroStrategy has outperformed Bitcoin for most of the year. The currency has increased 42% since January compared to MicroStrategy, which has exploded 207%. However, investing in Bitcoin by way of MicroStrategy comes at a premium, and some analysts don’t believe the benefits outweigh the cost.