The stock price of Microstargy, led by CEO Michael Saylor, has surged by an impressive over 400% in 2024, all thanks to its aggressive Bitcoin purchasing strategy.
Since mid-2020, the company has purchased 444,262 bitcoins worth about $42 billion today, which it purchased for a total of $27.7 billion, at an average price of $62,257 per Bitcoin.
This move has significantly boosted the company’s value, growing its market cap from $1.1 billion to $84 billion in just a few years. After four years of buying Bitcoin, MicroStrategy is now the fourth-largest holder, behind Satoshi Nakamoto, BlackRock’s iShares Bitcoin Trust, and Binance.
Michael Saylor sees Bitcoin as the future of money and a new form of digital capital. He predicts that Bitcoin’s value could reach $13 million by 2045, growing at an average of 29% per year.
He also compares Bitcoin to New York City real estate by saying, “Every day is a good day to buy Bitcoin. We look at it as cyber-Manhattan.”
MicroStrategy’s aggressive Bitcoin strategy carries both risks and rewards. On the one hand, it has significantly boosted the company’s stock price. On the other hand, the strategy has made the company heavily reliant on the fluctuating value of Bitcoin, which can be volatile.
If Bitcoin’s price falls, it could lead to significant losses for the company. However, Saylor believes that Bitcoin will continue to appreciate over time, providing substantial returns in the long run.
The market has reacted positively to MicroStrategy’s Bitcoin strategy, driving significant stock gains and boosting the broader crypto market. While it has inspired others to consider Bitcoin, some remain skeptical about the risks of relying on a volatile asset.
Peter Schiff, chief economist and global strategist at Euro Pacific Asset Management, posted on X on November 12 to his 1 million followers, saying, “Wash, rinse, repeat — what could possibly go wrong?”
Experts have mixed opinions on MicroStrategy’s strategy. Jacob King criticized MicroStrategy’s strategy, calling it a “reflexive loop” that only works if Bitcoin keeps rising. He warned that if Bitcoin’s value drops, the company could face a massive collapse, worse than failures like FTX, Enron, and Madoff’s scheme. This highlights the risks of relying too much on Bitcoin’s price.
Also Read: MicroStrategy Buys another 5,262 BTC worth $561 million
