Business intelligence firm MicroStrategy is attracting growing interest from investors as its bullish prediction for Bitcoin pays off. The enterprise, listed on Nasdaq as MSTR, rallied above the $500 level on Friday, November 24.
The Bitcoin-bull firm regained the high watermark that has become elusive since December 2021. According to Nasdaq data, the Phong Le-led firm’s stock rode on the Bitcoin uptick to realize a $7.33 billion market capitalization.
MicroStrategy Reaps From Long Strategy to Hold Bitcoin
The US business firm, also providing mobile software and cloud services, is reaping the benefits of its long strategy of holding Bitcoin. The continued accumulation of Bitcoin has translated to the winning strategy attributed to the surge to a nearly two-year high.
A review of data available in the New York-based exchange affirms MicroStrategy began with a quarterly loss. The firm, formerly led by Michael Saylor till August 2022, realized a quick turnaround as its stock price doubled in its 30-day run.
Saylor explained that the company’s rise to command as a leading institutional holder of Bitcoin began in August 2020. Its chair indicated that acquiring Bitcoin constituted a hedging strategy to overcome the invasive inflation. The surge witnessed on Friday, as per data from the tech-heavy exchange, portrays benefits from the fairly bullish belief demonstrated by MicroStrategy in the past two years.
Saylor iterated in an interview with CNBC that MicroStrategy stock would rise as Bitcoin demand increases. He observed that Bitcoin and MicroStrategy Stock would identify with Wall Street history to rally to record levels by projecting that when the supply would contract in the looming halving.
Retracing the MicroStrategy journey this year shows its Bitcoin holdings turned green in April as the lead crypto eclipsed the $30,000 level. Saylor’s firm acquired 1045 Bitcoin to increase its holdings to 140,000 units. The average acquisition price per asset declined to $29,803 as the aggregate total surpassed $4 billion.
MicroStrategy Shrug Off Quarterly Loss to Acquire Additional Bitcoins
A review of the second-quarter earnings shows the firm reported a $24 million impairment charge from Bitcoin. MicroStrategy’s bullish belief led to the acquisition of additional Bitcoins. In particular, it cemented its position as the lead publicly traded firm holding Bitcoin by amassing 152,800 tokens valued at $4.4 billion.
While Bitcoin signaled a comeback, the stock of firms affiliated with Bitcoin exposure bettered the token that already gained 87% in 2023. The quarterly report released early this month disclosed a $143.4 million net loss. The figure portrayed a deeper shade into the red, unlike the $27 million loss in 2022.
The turn of events hardly derailed MicroStrategy from acquiring Bitcoin, with another 6067 tokens purchased for $167 million. The Virginia-based company now accounts for 0.75% of circulating Bitcoins.
MicroStrategy Stock Movement Amid Spot Bitcoin ETF Approval?
MicroStrategy’s stock would sustain the rally fuelled by a corresponding surge in Bitcoin price. Similarly, approving a dozen applications for spot Bitcoin exchange-traded funds (ETF) pending before the US Securities and Exchange Commission (SEC) would fuel the uptick further.
Saylor expressed optimism that spot Bitcoin ETF approval could influence the investors’ appetite for the business intelligence firm stock (MSTR). He predicted that the growing interest portrayed by Wall Street firms in the ETF will accelerate Bitcoin awareness and adoption among institutions whose investors suffer from inadequate knowledge about the global largest token by market capitalization.