Since MicroStrategy announced a convertible bond sale on November 18 to acquire more Bitcoin, the company’s stock has increased nearly 40%. This has made MicroStrategy one of the top 100 listed businesses in the US market, surpass Intel and Dell.
The company used the proceeds from this sale to buy $4.6 billion worth of Bitcoin on the same day it announced the issuance of convertible bonds worth $1.75 billion. Two days later, high demand prompted the company to expand the offering to $2.6 billion.
MicroStrategy’s market capitalization is nearly $110 trillion
The latest buying and Bitcoin bull run have pushed MicroStrategy’s stock market capitalization to over $107 trillion. However, this large purchase does not come as a surprise. Just a week before that, the company bought $2 billion in BTC.
This stock price bull run is proof that Michael Saylor’s Bitcoin-centric policy is benefiting the company, especially after the election. Since its initial purchase in 2020, the company has gradually built up its Bitcoin reserves, having spent $16.5 million so far.
Thanks to Saylor’s pioneering BTC approach, the company has significantly surpassed other well-known companies in the US stock market. MicroStrategy was among the top performing stocks today. MSTR even rose to the top of the list for a while, which immediately attracted the attention of analysts.
“Wow MSTR is the most traded stock in the US today… surpassing TSLA and NVDA is unbelievable. It’s been years since a stock traded more than either of those stocks (in fact it may have been GME the last time it did). It’s also about twice the size of SPY! Wild times,” said Bloomberg senior ETF analyst Eric Balchunas. share on X.
MicroStrategy’s price increase puts the company in the top 87 at the time of writing. Throughout 2024, the company’s stock saw a staggering 915% price increase. MicroStrategy’s Bitcoin strategy further reflects the trend of increasing institutional adoption.
Amid continuing inflation fears and unpredictable monetary policy, companies are increasingly turning to digital gold as a hedge.
Some analysts see MicroStrategy’s approach as visionary, while others caution against putting all your eggs in one basket. Despite the recent price rally, MicroStrategy’s Bitcoin-heavy balance sheet leaves it exposed to significant risk. A sharp drop in Bitcoin’s price could lead to huge losses, causing concern for risk-averse investors.
On the contrary, MicroStrategy’s massive Bitcoin purchase has major implications for the cryptocurrency market, contributing to increased liquidity and price stability.
Thanks to their massive scale, their large BTC purchases create a positive feedback loop that asserts itself. The company’s actions also demonstrate growing confidence in Bitcoin among traditional investors.
Looking ahead, MicroStrategy’s approach will be a valuable use case for determining whether diversification or loyalty is the way to go.