MicroStrategy (MSTR) Stock Extends Gains Nearing $200, Outperforming Bitcoin

The Virginia-based firm holds around $16 billion worth of Bitcoin, making the company a proxy for the cryptocurrency.

MicroStrategy (NASDAQ:MSTR) stock continued its rally on Tuesday, coming closer to the $200 mark. The Virginia-based firm is known for its vast Bitcoin holdings, which stand at around $16 billion, making the company a proxy for the cryptocurrency.

Usually, movements in Bitcoin prices and MicroStrategy stock are observed to be coinciding. In this case, however, the company’s surge did not occur in tandem with an increase in Bitcoin prices.

As the NASDAQ and the S&P 500 fell 1% on Monday, Bitcoin also declined. Within an hour, the crypto slid from $64,000 to $62,800, concluding the day at around $63,300. On Tuesday, the currency was seen hovering around $62,000, while MicroStrategy hit $198.

The company, on the other hand, has been adding to its Bitcoin war chest. Back in March, the last time MicroStrategy hit $190, its shares had jumped a few weeks after the company announced the purchase of 12,000 Bitcoins.

This time, the surge comes almost a month after U.S. Security and Exchange Commission filings revealed that the company had acquired an additional 18,300 Bitcoins between August and September, the largest amount of tokens acquired since 2021.

MicroStrategy's Bitcoin Bet

In 2020, Michael Saylor, MicroStrategy’s former CEO and now executive chairman, decided to pivot the company’s business strategy. The decision was to begin investing a bulk of its reserves in Bitcoin, a currency he was once skeptical of, to protect the company’s war chest from inflation.

Since then, the company has amassed 252,220 bitcoins, which is about 43% of the company’s market capitalization and 1% of the Bitcoin in existence. Despite naysayers, Saylor’s business plan has paid off substantially.

After suffering the consequences of holding a volatile currency, MicroStrategy stock surged 300% in 2023, rising from $14 to $63 by the end of the year. In 2024, the company continued to see gains as traditional financial institutions moved into the crypto space with the approval of spot Bitcoin exchange-traded funds, pushing the stock price to highs in March.

For the better part of the year, MicroStrategy has outperformed Bitcoin, which has risen 42% since January, compared to MicroStrategy, which has exploded 207%. But investing in Bitcoin through MicroStrategy comes at a premium, and some analysts don’t think the benefits are worth the extra cost.

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