MicroStrategy's Bitcoin Obsession: A Tale of Success and Volatility

MicroStrategy: From Business Intelligence to Bitcoin Champion

You may remember MicroStrategy as the little known software company focused on business intelligence. But forget about that! Now it's all about bitcoin. MicroStrategy's stock has skyrocketed in recent years thanks to its massive investment in the cryptocurrency. Who needs revenue growth and market share gains when you have bitcoin right?

In it for the Bitcoin

MicroStrategy started buying bitcoin in mid 2020 and hasn't looked back since. The company has amassed a whopping 174,530 bitcoins worth billions of dollars. Wall Street is loving the story with the stock doubling bitcoin's gains this year. It's like Agent K said 'We're gonna have to work on our sarcasm.' Well MicroStrategy's investment in bitcoin is no joke.

Bitcoin's Rollercoaster Ride

Unfortunately MicroStrategy's fortunes are closely tied to the volatile nature of bitcoin. When bitcoin plummets so does MicroStrategy. In 2022 a 64% drop in bitcoin's price caused MicroStrategy's stock to plummet by 74%. Ouch! But hey what's life without a little rollercoaster ride?

The Bitcoin Strategy

MicroStrategy's co founder Michael Saylor had a genius idea. Instead of buying bitcoin directly why not let investors have a stake in bitcoin through the company's stock? Brilliant! And it seems to be working. Saylor even wrote a book about bitcoin titled 'What is Money?' I wonder if there's a chapter on buying crypto with a business intelligence company's cash.

The Future of Bitcoin

According to Saylor the bull market in bitcoin is far from over. He's optimistic that more and more people will allocate their capital to this digital asset. As he puts it 'People as they get educated on digital assets are realizing that they ought to be allocating more and more of their capital to this digital asset and so they're moving from .1 to .2%.' Move over real estate and stocks it's time for bitcoin to shine.

Bitcoin ETFs and the Competition

Bitcoin ETFs are on the horizon which means more ways for investors to tap into the market. But don't worry MicroStrategy isn't sweating the competition. In fact they see it as a 'very high class problem.' If a bitcoin ETF gets approved the price of bitcoin could soar even higher. Now that's music to their ears.