After completing a $2 billion Bitcoin acquisition, MicroStrategy’s stock price reached an all-time high on Monday, breaking a nearly 25-year-old record. The company’s stock surged almost 26% on Monday, hitting a new high above $351 after the world’s largest corporate Bitcoin reserve holder announced its latest purchase.
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MSTR shares ended the day at $340, but climbed to $354 in after-hours trading, according to Google Finance.
Strengthening Treasury with Over 27,200 BTC
MicroStrategy announced on Monday that it had acquired more than $2 billion worth of Bitcoin between October 31 and November 10, bringing its total Bitcoin holdings to 279,420 BTC, currently valued at approximately $24.3 billion. As of now, the Virginia-based company’s stock has risen 396% year-to-date, outpacing Bitcoin’s 97% rise to around $87,000 over the same period. Bitcoin hit a record price of $88,364 on Monday afternoon, according to CoinGecko, before dipping slightly.
Investor Optimism with Hopes for a Crypto-Friendly Administration
With Donald Trump winning the White House last week, MicroStrategy’s stock has seen increased investor enthusiasm, fueled by expectations of a more crypto-friendly administration.
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Founded in 1989, the software company, which now identifies itself as a “Bitcoin development company,” began buying BTC in August 2020. Years of Bitcoin acquisitions have helped MicroStrategy surpass its previous all-time high of $313, originally set in March 2000, according to Macrotrends.
Three-Year Plan to Acquire $42 Billion Worth of Bitcoin
Last month, MicroStrategy announced a three-year plan to purchase $42 billion worth of Bitcoin through capital raises. By issuing equity and debt, the company has effectively turned itself into a leveraged bet on Bitcoin, accumulating the asset for investors.
MicroStrategy President and CEO Phong Le said in a statement last month: “Our focus remains on increasing value for our shareholders by leveraging the digital transformation of capital. As a Bitcoin treasury company, we plan to use additional capital to buy more Bitcoin as a treasury reserve asset.”
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This year, MicroStrategy raised capital by issuing convertible notes, which buyers can later convert into shares. The company also issued equity through an at-the-market offering program, diluting shareholders but using the proceeds to buy more Bitcoin.
Still a Popular Choice Despite the Boom in Bitcoin ETFs
Although spot Bitcoin ETFs have attracted more than $26 billion in inflows this year, MicroStrategy remains a popular proxy for Bitcoin. Meanwhile, the company’s valuation has risen far beyond its Bitcoin holdings. According to a report from asset manager Bernstein last month, MicroStrategy is “building a case” for this premium, demonstrating that it can sustainably increase its Bitcoin holdings per share amid a lack of comparable investment vehicles.
Future Prospects and Market Implications
MicroStrategy has shown investors how a company can pioneer the cryptocurrency market. Its consistent accumulation of Bitcoin has not only boosted its stock value but also serves as a model for other companies aiming to diversify their treasury assets. MicroStrategy’s successful Bitcoin acquisition strategy raises questions about the sustainability of such efforts and whether other companies may follow suit.
The decision to acquire Bitcoin on such a large scale also impacts the cryptocurrency market. The company’s approach to managing risk with these significant transactions will continue to be closely watched by investors.
With plans for expansion over the next three years, MicroStrategy could become one of the most influential names in the Bitcoin market, not only as a major holder but also as a firm betting on the asset’s future growth potential. Its ongoing Bitcoin purchases could drive the price of Bitcoin even higher, especially as investors seek reliable and secure digital assets.
MicroStrategy’s success demonstrates that holding Bitcoin is not just a long-term investment but also a way to increase the company’s value in the eyes of shareholders and investors.
