Originally published on: August 11, 2024
In a bold move back in August 2020, MicroStrategy made history by becoming the first publicly-traded company to add Bitcoin to its treasury reserves. Fast forward four years, and this gamble has paid off big time, outshining even Warren Buffet’s Berkshire Hathaway.
As of August 10, 2024, MicroStrategy boasted a whopping 226,500 BTC valued at $13.771 billion, acquired at an average cost of $37,000. With Bitcoin’s current value hovering around $60,500, the company proudly holds unrealized profits of approximately $5.39 billion.
Despite hitting the jackpot, MicroStrategy has stood firm in its decision to hold on to its Bitcoin assets, with plans to continue accumulating more, as evidenced by its recent purchase on August 1.
The company’s moves have not only boosted its Bitcoin returns but have also propelled its MSTR stock value, soaring by a staggering 1,000% since August 2020. This growth outperforms BTC’s returns by 1.5 times and trumps the S&P 500 index by 16.25 times during the same period.
Interestingly, MicroStrategy’s success contrasts sharply with Warren Buffet’s Berkshire Hathaway, as the latter’s Class A stock has seen lackluster gains of just 104.75% since MicroStrategy’s initial Bitcoin venture. Buffet’s persistent aversion to Bitcoin has prevented Berkshire Hathaway from exploring this lucrative market.
While some traders are eyeing short positions on the MSTR stock, investment firm Kerrisdale Capital has raised concerns about its overvaluation compared to Bitcoin. According to Sahm Adrangi, chief investment officer at Kerrisdale Capital, the software business underlying MSTR may not justify its premium valuation, suggesting caution in the market.
Despite the debates, one thing is clear – MicroStrategy’s Bitcoin bet has paid off handsomely, far exceeding expectations and solidifying its position as a trendsetter in the crypto investment landscape.