MicroStrategy: A Spot Bitcoin ETF
If you look up the company profile of MicroStrategy, you might get the impression that the company specializes in artificial intelligence-powered software. While the company does derive some revenue from AI software sales, MicroStrategy is known as a Bitcoin hoarder first and foremost.
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MicroStrategy holds an aggressive Bitcoin accumulating strategy, including investing fresh software-business cash flows into more Bitcoin holdings, and selling stock on the open market to finance further cryptocurrency buys.
As of the second quarter of 2024. MicroStrategy held 226,331 Bitcoin, worth approximately $10.75 billion at today’s Bitcoin prices. This substantial holding accounts for more than 1% of the total Bitcoin that will ever be mined.
CEO Phong Le has stated that the company is acquiring Bitcoin holdings more quickly than it is issuing shares.
The correlation between MicroStrategy stock and Bitcoin prices is impressive. When Bitcoin surges, MicroStrategy soars.
MicroStrategy shares have rised more than 100% year to date, and more than 300% over the last 52 weeks, even though the company’s financials haven’t necessarily justified this magnitude of returns.
In the second quarter of 2024, MicroStrategy reported a net loss of $102.6 million, equating to $5.74 per share.
As of August 22, MicroStrategy live share price is $141.42.
Michael Saylor, the co-founder and executive chairman of MicroStrategy, characterized MicroStrategy as a more ambitious version of spot Bitcoin exchange-traded funds (ETFs).
While these ETFs primarily buy and sell Bitcoin to meet shareholder demand, MicroStrategy aims to surpass the performance of both the Bitcoin market and spot Bitcoin ETFs by increasing its cryptocurrency holdings.
If you believe that Bitcoin will rise in value over time, you can see MicroStrategy as a leveraged investment in this trend. If, however, you don’t like the idea of speculating on a volatile asset like Bitcoin, it’s best not to invest in it at all.
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