MicroStrategy surprises the market with Bitcoin-based strategy

MicroStrategy, a previously little-known software company, shocked the financial market by becoming one of the highest valued stocks in the United States in 2023. With an impressive 337% increase in share value, it surpassed tech giants such as Nvidia and Meta. , with growth of 234% and 194% respectively.

MicroStrategy was founded almost 35 years ago and has built a reputation in the field of business intelligence. However, its recent rise is due to an atypical and bold investment strategy in Bitcoin, which stands out significantly from its peers in the technology sector, which generally rely on revenue growth and market share expansion.

The company’s forays into the world of cryptocurrencies started in mid-2020, when it started buying Bitcoin. MicroStrategy currently owns approximately 174,530 bitcoins, worth approximately $7.65 billion.

This bold investment significantly increased the company’s market value, which now stands at approximately $8.5 billion, with 90% of this value directly tied to its Bitcoin assets.

The adopted strategy aroused great interest on Wall Street. Joseph Vafi, an analyst at Canaccord Genuity who has a buy rating on the stock, emphasized that while the company’s core business remains solid, the big draw for investors is undoubtedly Bitcoin.

This perspective is reflected in the performance of MicroStrategy stock, which has followed the rise of Bitcoin.

Despite the recent appreciation, MicroStrategy shares are still trading below their 2021 peak. The company’s decision to invest in Bitcoin came from a desire to use its cash reserves more efficiently in a low interest rate environment.

Michael Saylor, the company’s co-founder and then-CEO, saw Bitcoin as a digital alternative to gold, offering a stronger and more flexible investment option.

This strategy provided investors with an innovative way to have an indirect stake in Bitcoin and also positioned MicroStrategy as a pioneer in digital asset investing.

Saylor, now the company’s executive chairman, remains optimistic about Bitcoin’s future and predicts continued growth in the digital asset market.

Source: Live Coins