MicroStrategy's Big Bet on Bitcoin

If you can't wait for a Bitcoin ETF to get some exposure to BTC in your stock portfolio, you've probably heard of a company called MicroStrategy (NASDAQ: MSTR) by now. While nothing quite beats hodling your own satoshis in your own wallet with your own keys for Bitcoin exposure, MSTR has traded in tandem with Bitcoin, almost step for step. The blue line represents MSTR and the black line represents BTC.

So just why do the two move so closely together? For starters, most of MicroStrategy's company value is in Bitcoin. Specifically, as of November 2023, the company held 174,530 Bitcoins in its reserves, which the firm has paid an average of $30,252 per token. That puts their gains on the digital currency at over $2 billion.

The company, headed by Michael Saylor, uses the cryptocurrency to protect the value of its reserves. Saylor believes Bitcoin will ultimately prove to be the ultimate store of value. It intends to hold the coins for the long-term and plans to become one of the largest hodlers. In its most recent earnings report, MicroStrategy stated:

Due to its limited supply, Bitcoin offers the opportunity for appreciation in value if its adoption increases and has the potential to serve as a hedge against inflation in the long-term.

Last week, to kick off 2024, Saylor disclosed that he would sell 310,000 shares of MSTR from his personal holdings in the company. The value of the shares is over $216 million. The proceeds from the stock sale, according to Saylor, will be used for personal obligations and to add to his personal Bitcoin holdings. MicroStrategy remains the largest corporate hodler of Bitcoin. Saylor himself personally owns nearly 18,000 Bitcoins.

While the company is known largely for its Bitcoin-rich treasury, its actual business is in cloud-based services, mobile software, and business intelligence services. But that side note seems like an irrelevant side note to this story, which revolves around a man with a vision.

Saylor says he sees 2024 as "the year of Bitcoin" and believes there will be much room to the upside for the digital coin. With the next halving coming up this year, it just may be.