Originally published on: December 17, 2024
MicroStrategy has been making waves in the market, with its stock prices surging by 546% this year and its market cap sitting at $99.4 billion. The key driver behind this impressive performance? Its significant Bitcoin reserve, which has seen the company add a whopping 249,850 BTC in 2024, bringing its total holdings to 439,000 BTC.
As MicroStrategy inches closer to the $100 billion market cap milestone, the company is on track to outperform some of America’s biggest names if Bitcoin reaches higher price levels.
With nearly half a million BTC in its treasury, MicroStrategy currently stands as the largest corporate holder of Bitcoin, surpassing its closest competitor, Marathon Digital, by a staggering 985%.
Monitoring Bitcoin’s price movements gives us a direct insight into MicroStrategy’s market cap potential. According to the company’s net asset value (NAV) worksheet, its fully diluted market cap is estimated at $114 billion, with the derived NAV around $40 billion.
Based on MicroStrategy’s Bitcoin holdings, a $1,000 movement in the crypto asset’s price translates to roughly $440 million gain in the company’s market cap.
With Starbucks’ market cap sitting at $105.5 billion and Nike’s at $115 billion, a mere 11% rally in Bitcoin to $118,810 would propel MicroStrategy’s market cap above Starbucks’. A 32% surge to $140,000 per BTC would see MicroStrategy surpassing Nike, assuming the company does not increase its current BTC holdings.
MicroStrategy’s strategic approach to Bitcoin involves leveraging debt to acquire more of the cryptocurrency, a tactic that has its critics but has proven successful for the company in driving up BTC prices. While skeptics like Zach Rynes express concerns about the debt-based acquisition strategy, experts like Ki-Young Ju, CEO of CryptoQuant, believe that MicroStrategy’s trade is relatively safe unless faced with an unforeseen catastrophic event.
With MicroStrategy’s debt currently at $7 billion compared to its $47 billion BTC holdings, the company seems well positioned to capitalize on Bitcoin’s potential growth and continue its upward trajectory in the market.
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