Following the Bitcoin ETF approval on January 10, MicroStrategy Inc. (NASDAQ: MSTR) experienced a significant downturn. The company, which has often been viewed as a proxy for Bitcoin (BTC) investment, is now contending with major Wall Street players in the cryptocurrency arena. The approval of 11 ETFs for the leading digital currency by the SEC led to a surge in BTC trading, reaching a high of $48,965 the following day. However, MSTR’s stock did not enjoy the same upward trajectory.
The Correlation Between MSTR and Bitcoin
Since Michael Saylor, CEO of MicroStrategy, began integrating BTC into the company’s treasury, the performance of MSTR has been closely tied to the price of Bitcoin. However, this correlation began to diverge at the onset of 2024, despite MSTR slightly outperforming Bitcoin in the previous year. The company’s shares reached a peak of $727.77 on the first trading day of the year, only to experience a subsequent decline. The most significant losses occurred on January 11, the first trading day for Bitcoin ETFs, with MSTR shares opening at $589.99 and closing on January 12 at $485.53 – a 19% loss over 48 hours.
MicroStrategy’s Bitcoin Holdings
It’s worth noting that MicroStrategy’s treasury holds 189,150 BTC, currently valued at $8.09 billion. In contrast, MicroStrategy’s market capitalization stands at $6.64 billion. Saylor began buying Bitcoin under the MicroStrategy banner on August 11, 2020, with an initial investment of $250 million for 21,454 BTC. Since then, MSTR has amassed a total of 189,150 BTC at an average cost of $29,582 per Bitcoin. Given the total reported cost of $4.68 billion, the company has an unrealized profit of $3.41 billion, representing a 72.8% increase.
The Risks and Opportunities of Investing in MSTR
Investing in MSTR is not only a way to indirectly engage with Bitcoin’s volatility but also a means to invest in the company’s operations. This presents both risks and opportunities for shareholders, allowing them to diversify their investments. For those looking to keep track of their investments in the volatile world of cryptocurrency, the cryptoview.io application can be a useful tool.
Invest in Cryptocurrencies with Cryptoview.io
Note: The information in this article should not be considered as financial advice. Investing in cryptocurrencies is speculative and involves a high level of risk.
