- MicroStrategy's stock value skyrockets by 200% since its investment in Bitcoin.
- The correlation of MSTR to NDX remains at zero but has grown by 67% to Bitcoin.
MicroStrategy Incorporated (Nasdaq: MSTR) stood out in 2020 as one of the companies that went all-in on Bitcoin as an investment asset. The company's core business is intelligence while it is publicly traded on Nasdaq.
Following the investment, MSTR's correlation to Bitcoin (BTC) has grown by 67%. In addition to that, its stock has increased in value by a massive 200%.
MicroStrategy reaps the fruits of investing in Bitcoin
On December 21, MicroStrategy purchased an additional 29,646 BTC for roughly $650 million. The coins were bought in cash as per the terms provided by the Treasury Reserve Policy at an average cost per coin of $21,928.
The intelligence company is said to hold 70,470 Bitcoin with an approximated value of $2.5 billion. According to the CEO of the firm, Michael J. Saylor:
The acquisition of additional bitcoins announced reaffirms our belief that Bitcoin, as the world's most widely-adopted cryptocurrency, is a dependable store of value. We believe the proactive management of our balance sheet, combined with the improved revenue and profitability performance of the company, have been significant factors in the recent appreciation in our stock price.
The optimistic outlook highlighted by Saylor has been confirmed by the 200% growth in the value of MSTR. With the correlation between the stock asset (MSTR) and the unconventional digital asset (BTC) growing to roughly 67% in the last 30 days, it is evident that the flagship cryptocurrency can be a growth catalyst to traditional investments.
MSTR/BTC/NDX chart
The chart below shows a near-zero growth value of Nasdaq (NDX) within the same period. Another chart shows MicroStrategy's return on Bitcoin treasury holdings growing by over 60% from levels slightly above 40%.
MicroStrategy return on BTC investment
The spike in the correlation between MSTR and BTC is an immaculate example of the benefits other firms can realize if they invested in the pioneer cryptocurrency. Other firms are likely to take advantage of the spike in the correlation and diversify their investment into Bitcoin.
Institutions such as Massachusetts Mutual Life Insurance (MassMutual) could increase their $100 million holdings in Bitcoin. Guggenheim Investments is likely to sink more money behind the cryptocurrency, considering that the firm's CEO, Scott Minerd, recently told Bloomberg that his BTC trading $400,000 in the future.
%20(99)-637455177779022897.png)
BTC/USD 4-hour chart
Bitcoin is trading at $34,650 after hitting a new all-time high at $35,888. As discussed earlier, the forerunner is getting ready for an ultimate liftoff to $50,000. However, investors should expect a correction or consolidation before the breakout. For now, establishing support at $34,000 is key to sustaining the uptrend.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.