Bitcoin‘s price remains stable around the $70,000 mark as March ends, with investors eagerly anticipating a breakout, which could be spurred by the approaching halving event in April. In parallel, MicroStrategy’s stock has experienced a significant uplift, influenced by the gradual increase in Bitcoin value over the last seven months.
MicroStrategy’s Bitcoin Accumulation
Under the leadership of Michael Saylor, MicroStrategy has secured a large Bitcoin portfolio, making additional purchases recently and solidifying its status as one of Bitcoin’s biggest holders. Even during intense bear markets, the company strategically bolstered its Bitcoin reserves through the issuance of debt securities, echoing Saylor’s investment approach that dates back to the dotcom era.
Saylor’s investment decisions are not merely a reflection of his belief in Bitcoin but are based on the digital currency’s historical price increases, which he has capitalized on. Notably, MicroStrategy’s shares have acted as a proxy for a direct Bitcoin ETF, and investors have leveraged this to gain exposure to Bitcoin’s price movements.
With MicroStrategy’s impressive holding of over 214,000 BTC, its share price has enjoyed growth parallel to Bitcoin’s performance. Accounting for about 1% of Bitcoin’s total supply, the company’s actions offer a glimpse into the cryptocurrency‘s future potential. Institutional hands hold a mere 5% of Bitcoin’s supply, highlighting the asset’s scarcity against a global population.
Despite a 170% increase in MSTR shares in 2024, analysis by 10X Research suggests the company’s valuation is inflated, comparable to previous scenarios with GBTC and GSOL, which eventually corrected through market sales. Markus Thielen’s analysis indicates that the share price exceeds its BTC reserve value by over 100%, spurred by investor demand amidst anticipation of ETF approval.
Ultimately, while Bitcoin’s upward price trajectory may persist, a correction in MicroStrategy’s overvalued share price seems plausible in the near future.