Founded by Michael Saylor nearly three and a half decades ago, MicroStrategy (NASDAQ: MSTR) has primarily been a business intelligence software firm flying under the radar. However, in 2023, it saw an extraordinary 337% increase in its stock, making it one of the biggest winners among U.S. companies with a valuation of $5 billion or more. This leap surpassed the notable ascents of Nvidia (NASDAQ: NVDA) and Meta (NASDAQ: META), which saw increases of 232% and 170% respectively. As of January 12, 2024, Bitcoin is priced at $45,920. This implies that Michael Saylor’s Bitcoin bet has yielded him over $600 million. He holds 17,732 BTC, acquired in 2020 at an average price of $9,882. This is assuming he hasn’t bought more of the cryptocurrency since. His firm, MicroStrategy, owns 189,150 Bitcoins, valued at $8.69 billion with an average purchase price of $31,168. This puts the profits at over $2.7 billion.
The Shift to Cryptocurrency Investment
By the middle of 2020, MicroStrategy had slightly more than $530 million in cash and short-term investments. Michael Saylor, then CEO and co-founder, noticed these funds were largely idle due to low-interest rates and decided to put them to work. His choice? The leading cryptocurrency, Bitcoin. This move offered investors a way to get Bitcoin exposure through conventional stock purchases, bypassing the need to directly buy the coins. Saylor, who stepped down as CEO last year and now serves as executive chairman, has seen the value of MicroStrategy’s stock skyrocket, largely due to its Bitcoin holdings. This has allowed investors to indirectly invest in Bitcoin by purchasing this company’s stocks.
Impact of Bitcoin ETFs on MicroStrategy
With the recent introduction of spot-Bitcoin ETFs, MicroStrategy’s appeal seems to have diminished, as its stock has experienced a decline, losing -5.21% from the previous close and -17.38% over the past 5 trading days. However, unlike passively managed ETFs, MicroStrategy has the advantage of actively leveraging its Bitcoin holdings. It can, for instance, use them as collateral to generate additional business opportunities.
The Future of Saylor’s Bitcoin Bet
Whether the approval of Bitcoin ETFs will relegate Saylor’s company to the sidelines or if it can successfully navigate this development remains to be seen. Nevertheless, the Michael Saylor Bitcoin bet has undeniably been a profitable venture so far. For those interested in tracking the performance of their own cryptocurrency investments, tools like cryptoview.io can provide valuable insights.
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