MicroStrategy Stock Skyrockets on Bitcoin Hoarding, Shares Up 160%
The mid-cap analytics company MicroStrategy (NASDAQ: MSTR) has generated big gains for investors in the past two quarters amid the massive rally in bitcoin (USD-BTC) price. The chairman and chief executive officer Michael Saylor’s strategy of converting fiat currency into digital coins worked for MicroStrategy because the company has successfully turned its millions of dollars into billions of dollars.
Michael Saylor believes holding money in fiat currency on the balance sheet could reduce the value of money by 15% each year. MicroStrategy stock price rose almost 166% year to date, enlarging the twelve months rally to 600%.
Microstrategy Turned Millions Into Billion Through Bitcoin Buying
Microstrategy is the first publically traded company to establish bitcoin as an asset on its balance sheet and this was done well before the largest electric car maker Tesla’s (NASDAQ: TSLA) investment of $1.5 billion in bitcoins.
The company first bought 21,454 bitcoins at the beginning of the third quarter for an average price of $11653 per coin and then continued to add cryptocurrency during the fourth quarter of last year. The company ended the fourth quarter with 71079 bitcoins on its balance sheet.
Fortunately, the price of bitcoin rallied significantly in the past two quarters and accelerated the upside momentum since the beginning of this year. Bitcoin is currently trading close to $50K level, meaning that Michael Saylor’s strategy of buying bitcoin has significantly strengthened its balance sheet in a matter of few months alone.
Michael Saylor also suggests other corporate players convert fiat currency into bitcoins to enhance their purchasing power.
Michael Saylor said:
If your company has money on its balance sheets and it’s sitting in fiat currencies like euros and dollars, they are losing about 15% of their purchasing power each year,” Saylor said at the virtual summit that attracted industry participants from at least 16 countries, including Israel, Switzerland, Brazil, Iceland, Ireland, Italy and Portugal. “The simple solution is to convert some of that cash into Bitcoin.”