Bitcoin has surged above $64,000, and MicroStrategy shares have increased by 40% over the past three days in Suqian, Jiangsu Province, China, as observed on February 29, 2024.
MicroStrategy’s shares rose more than 8% on Friday following an announcement from founder Michael Saylor that the company had acquired an additional $1.1 billion worth of bitcoin. For the week, the stock increased by 24% and has surged 124% so far this year.
In a post on platform “X,” Saylor disclosed that MicroStrategy’s average bitcoin purchase price over the past four years is $38,585 per coin. Currently, bitcoin is trading close to $60,000. MicroStrategy’s holdings of 244,800 bitcoins are valued at $14.6 billion.
Established in 1989, MicroStrategy operates in the enterprise software and cloud-based services sector, but its current market value is predominantly linked to its bitcoin investments, effectively turning the company into a proxy for the largest cryptocurrency. According to BitcoinTreasuries, MicroStrategy holds the most significant corporate stash of bitcoin.
Saylor mentioned in his Friday post that the “BTC yield,” a metric developed by MicroStrategy, stands at 17% for the year. This figure indicates that the company has generated 17% more value for shareholders by issuing stock to purchase bitcoin.
In an interview with CNBC, Saylor explained that MicroStrategy aims to provide various forms of bitcoin exposure. The company’s mission, he stated, is to securitize bitcoin and act as a bridge between traditional investors and the cryptocurrency.
Despite the recent rally, MicroStrategy shares remain about 26% below their March peak. The stock concluded Friday’s trading at $141.47.
Nonetheless, MicroStrategy is significantly outperforming bitcoin, which has risen 35% this year. Saylor noted that owning MicroStrategy shares offers a way to invest in bitcoin while benefiting from attributes such as increased leverage or downside protection.
Saylor added that some investors are either unable or unwilling to own bitcoin directly. He noted that some investors would prefer the volatility of the S&P combined with half the performance of bitcoin, indicating a preference for a diversified exposure to the cryptocurrency.
