MicroStrategy MSTR Makes New All Time High in Stock Value

• MicroStrategy stock has surged to record highs, gaining nearly 23% as its massive Bitcoin holdings benefit from cryptocurrency gains.
• MicroStrategy holds over 200,000 Bitcoins worth $6 billion. Aggressive Bitcoin accumulation by CEO Michael Saylor has made Bitcoin dwarf the actual software business.
• MicroStrategy’s market value now heavily depends on Bitcoin prices. The stock behaves like a leveraged Bitcoin ETF, with further gains if Bitcoin rises more but could see a hard hit if Bitcoin prices pull back.

MicroStrategy (MSTR) shares surged to record levels today, gaining nearly 23% amid a wave of gains in the cryptocurrency market. The enterprise analytics software company has accumulated a massive Bitcoin position and now holds about 1% of the total Bitcoin supply. Let’s take a closer look at what’s driving MicroStrategy stock higher.

MicroStrategy’s Massive Bitcoin Holdings

MicroStrategy holds an astounding 214,246 Bitcoins, worth over $6 billion at current prices. The company first began buying Bitcoin in August 2020 and has continued accumulating more. Just last week, MicroStrategy purchased another 9,245 Bitcoins for about $425 million in cash.

CEO Michael Saylor has been the driving force behind the Bitcoin buying spree. He believes the cryptocurrency will serve as a long-term store of value to protect against inflation. MicroStrategy’s Bitcoin horde now dwarfs its enterprise software business.

Bitcoin’s Surge Fuels MicroStrategy Rally

Bitcoin prices have been on a tear this week, surging past the $70,000 level to new all-time highs. The rally has also lifted shares of MicroStrategy, which tend to trade in correlation with Bitcoin prices.

As Bitcoin continues powering to unprecedented levels, it’s boosting the value of MicroStrategy’s holdings. With Bitcoin making up such a significant portion of MicroStrategy’s business, the company’s market value is heavily dependent on Bitcoin prices.

The Verdict on MicroStrategy Stock

MicroStrategy shares have skyrocketed thanks to aggressive Bitcoin accumulation. However, the stock looks extremely overvalued apart from its Bitcoin holdings.

Investors need to be aware that MicroStrategy stock now behaves much like a leveraged Bitcoin exchange-traded fund. While further Bitcoin gains could lift MicroStrategy higher, any pullback in Bitcoin prices would likely hit MicroStrategy stock hard. The company’s actual software business is dwarfed by its Bitcoin investments.