MicroStategy’s Bitcoin Bet Becomes Profitable As Bitcoin Reaches $30k• April 12, 2023 7:30 pm • Comments
It looks like MicroStrategy’s huge Bitcoin bet has finally become profitable again as the price of BTC once again reaches the $30k milestone.
From the beginning, the company had stated that it would maintain its current BTC positions and continue accumulating more throughout the bear market.
Due to its strategy, the company has become one of the largest institutional investors of Bitcoin in the last few years and it has amassed around $4.17 billion worth of the asset so far.
Whether or not other institutional investors join in on the company’s strategy seems to be only a matter of time as economic fears continue to persist.
Other firms also see the company’s stock as a way to gain indirect exposure to BTC without actually acquiring the digital asset itself directly.
Microstrategy’s #Bitcoin hoard is not 1 guy with 140K BTC.
It’s a public company that is owned by pension funds and represents millions of individuals who are exposed to the BTC through the stock.
I’m grateful for what Saylor is doing.
I don’t own the stock, I own BTC.
— Brad Mills 🔑⚡️ (@bradmillscan) April 12, 2023
MicroStrategy co-founder Michael Saylor introduced the Bitcoin strategy as a treasury hedging asset over the United States dollars. Apart from holding BTC personally and on the company’s balance sheet, Saylor also convinced several public companies to accumulate BTC on their balance sheets, including the likes of Tesla, SpaceX and a dozen others.
The Bitcoin bet made by the Fortune 500 company looked lucrative throughout the bull market in 2021.
However, a prolonged crypto winter in 2022 fueled by multiple crypto contagions brought upon by the collapse of leading crypto unicorns, crashed BTC price by over 70%.
The same Bitcoin bet that looked lucrative in 2021 attracted a lot of flak from crypto critics as MicroStrategy’s Bitcoin investment was at a 50% loss at the peak bear market in 2022.
However, Saylor always maintained that MicroStrategy had full confidence in Bitcoin’s underlying fundamentals and would continue to invest in the top cryptocurrency.
The growth seems promising in the crypto markets now as it seems that bullish sentiment as returned despite the bear market that had persisted throughout 2022.
Based on historical data, it seems that the market cycles for crypto last for around 4 years which means that there are a lot of indicators that are signaling that the next bull market may begin within the next year.
Coincidentally, that is also when the next Bitcoin halving takes place which has been a major indicator for where we are in the market cycle.
As of now, the events of things like the FTX collapse and the Terra-Luna implosion no longer have any affect on the markets.
The price of MicroStrategy’s stock is also heavily correlated with Bitcoin now due to the company’s heavy exposure.
JUST IN: Bank of America and Fidelity both became top 10 share holders of MicroStrategy in Q’1 2023 👀😮 pic.twitter.com/8wIkn0D4Ij
— Bitcoin News ⚡ (@BitcoinNewsCom) April 7, 2023
Saylor has repeated that MicroStrategy has no intention of selling its Bitcoin holdings in the foreseeable future, except for a single instance at the end of last year when the company sold a portion of its holdings solely for the purpose of securing “tax benefits.”
MicroStrategy’s investment in Bitcoin has also been a significant driver of its recent stock price performance.
On Monday, the company’s shares (NASDAQ: MSTR) closed at $312.78, marking a 7.82% increase over the course of the day.
Notably, the stock has seen a remarkable growth of 40% in the past month.
Bank of America and Fidelity purchased over $75 MILLION of MicroStrategy stock in Q1.
— Bitcoin Magazine (@BitcoinMagazine) April 7, 2023
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