Key Points
- MicroStrategy’s stock (MSTR) has surged 68% since September, nearing its all-time high (ATH).
- The company’s massive Bitcoin holdings, estimated at $16 billion, have been linked to the stock’s rally.
MicroStrategy, also known by its ticker symbol MSTR, has seen a significant increase in its stock value, reaching a six-month high of $198. This is just below its all-time high (ATH) of $200. The upturn aligns with a cryptic message from the company’s founder, Michael Saylor.
Saylor’s Cryptic Message
In a recent post on the social media platform X (formerly known as Twitter), Saylor appeared in a gladiator-like outfit, adorned with a Bitcoin pendant and a sword. This could be interpreted as a public declaration of his commitment to Bitcoin amidst economic instability and inflation driven by fiat currencies.
Saylor is a well-known Bitcoin advocate, with a firm belief in Bitcoin’s superiority as an asset and a store of value. This belief is rooted in Bitcoin’s fixed supply and its resistance to censorship, making it, in his eyes, the most valuable asset in human history. This conviction has shaped the Bitcoin treasury strategy of MicroStrategy, which Saylor pioneered.
MicroStrategy’s Bitcoin Holdings
The software company, which focuses on Bitcoin, now holds nearly $16 billion worth of the cryptocurrency, equivalent to 252,000 coins. Over $1.5 billion of this was acquired in the third quarter of 2024.
CryptoQuant has suggested a correlation between MicroStrategy’s stock rally and its substantial Bitcoin holdings. Since the company began purchasing Bitcoin in August 2020, its stock has surged by 1,208%, while Bitcoin itself has risen by 445%.
Despite this, the recent rally of MSTR has shown a complete decoupling from Bitcoin. Since September, MSTR has rallied 68%, rising from $114 to nearly $200. During the same period, Bitcoin only increased by 18% and is currently facing significant resistance.
On a year-to-date basis, MSTR has increased by 177%, while Bitcoin has only seen a 38% increase. This suggests that MSTR investors have seen greater profits than those investing in Bitcoin directly.
At the same time, MSTR’s relative strength index (RSI) is indicating an overbought signal, which could complicate the short-term outlook, particularly with the approaching earnings season.
The question arises as to why investors would choose to indirectly hold Bitcoin through MSTR rather than buying the asset directly. Jeff Park from Bitwise views MSTR as a long and short global carry trade simultaneously. This involves borrowing at low-interest rates to invest in high-yielding assets like Bitcoin, while also hedging against global inflation.
