MicroStrategy sees 8% stock surge following increase in bitcoin holdings to $14.6 billion

MicroStrategy’s stock surged more than 8% on Friday following the announcement by founder Michael Saylor that the company had acquired an additional $1.1 billion worth of bitcoin. This move contributed to a 24% increase in the stock price for the week, bringing its total gains for the year to 124%.

Saylor revealed in a social media post on X that MicroStrategy’s average purchase price for bitcoin over the past four years stands at $38,585 per coin, while the current trading price hovers around $60,000. The company’s substantial bitcoin holdings amount to 244,800 bitcoins, valued at $14.6 billion.

Established in 1989, MicroStrategy initially focused on enterprise software and cloud-based services. However, its recent pivot towards bitcoin investment has significantly impacted its valuation, essentially linking its worth to the performance of the leading cryptocurrency. As the largest corporate holder of bitcoin, MicroStrategy serves as a notable proxy for the digital asset, as per Bitcoin Treasuries.

Saylor introduced the concept of “BTC yield,” a metric devised by MicroStrategy, indicating a 17% value increase for shareholders through the sale of stock to fund bitcoin purchases. In an interview with CNBC, Saylor emphasized the company’s mission to securitize bitcoin and act as a conduit between traditional investors and the cryptocurrency market.

Despite the recent stock rally, MicroStrategy shares remain approximately 26% below their peak in March, closing at $141.47 on Friday. While the company has outperformed bitcoin, which has seen a 35% rise this year, Saylor suggested that investing in MicroStrategy offers unique advantages such as leverage and downside protection compared to direct bitcoin ownership.

Saylor highlighted the appeal of MicroStrategy for investors who seek exposure to bitcoin but prefer a diversified approach. He noted that some individuals are drawn to assets like the S&P 500 for stability and are content with achieving half of bitcoin’s performance. MicroStrategy’s evolving role in the crypto space underscores its strategic positioning to cater to a broad spectrum of investors seeking exposure to digital assets with varying risk appetites and investment preferences.