MicroStrategy (NASDAQ: MSTR) has emerged as the publicly traded company that has established the strongest correlation between its prospects and the dominant cryptocurrency Bitcoin (BTC) under the leadership of Michael Saylor.
The business is the largest corporate holder of Bitcoin, and there are no indications that its accumulation strategy is slowing down. As BTC is on the brink of surpassing the $100,000 threshold and the bull market is already in full motion, MSTR shares have generated substantial gains.
The accumulation strategy is currently outperforming even the most fervent miners, and Saylor and MicroStrategy are continuing to double down and purchase BTC despite market conditions. In fact, it is outperforming BTC itself. The value of one bitcoin was $97,930,000 at the time of publication, following a 46% increase on the monthly chart that has increased the year-to-date gains to 132.03%.
According to its most recent Form 8-K filing, MicroStrategy concluded its largest acquisition to date on November 25, purchasing 55,000 BTC for $5.4 billion. This announcement was a clear declaration of optimism.
In the most recent acquisition, the company acquired Bitcoin at an average price of $97,862. MicroStrategy has currently acquired 386,700 BTC at an average price of $56,761; in total, the company has invested $21.9 billion in the digital asset.
Microstrategy employs a metric known as Bitcoin yield in its filings, which essentially compares the company’s BTC holdings with the diluted MSTR shares outstanding. A business can determine whether its acquisition strategy adds value by monitoring the percentage change of this ratio.
The YTD BTC yield was 41.8% at the time of the company’s most recent 8-K filing; however, it has since risen to 59.3% as a result of this latest acquisition.
The strategy is performing admirably in the current bull market, despite the fact that MSTR stock is exceedingly susceptible to fluctuations in the price of BTC. In the event that a recession is followed by a pessimistic crypto market, MicroStrategy would likely be compelled to sell off its holdings, which would result in prices falling even further, as warned by numerous analysts.
While MSTR stock is inherently risky due to its significant dependence on a single asset, Saylor and his team may be able to achieve their goal of becoming the first “Bitcoin bank” by diversifying away from their current, highly concentrated mode of operation with the advent of widespread institutional adoption.
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