MicroStrategy’s Stock Price Blows Up

MicroStrategy’s MSTR stock price has completed an incredibly successful year that has seen it perform the big hitters in the stock market. A year ago, the MSTR stock price was sitting at a low of $45. However, as the Bitcoin price recovered and the company’s BTC portfolio grew, so did the company’s stock price.

In only one year, the price surged more than 317% to reach a new all-time high of $192 back in March 2024, according to data from TradingView. This put it above its previous February 2000 peak of $139, making it its highest level in more than two decades. Interestingly, the surge to the $192 all-time high in March coincided with the the Bitcoin all-tine high of $73,750 in the same month.

This suggests that the MicroStrategy stock price is closely correlated with the Bitcoin price performance. It’s understandable given that Bitcoin has become the company’s largest holdings, meaning that as the Bitcoin price rises, so does the valuation of the company, translating to an increase in the stock price.

Currently sitting at $167 at the time of this writing, meaning it’s 16% down from its $192 all-time high. However, it is still 250% higher than its $45 price level a year ago. This puts it ahead of the likes of Apple which is up only 24% year to date and Amazon, with a 34% year-to-date increase. Even NVIDIA’s outstanding performance falls behind MicroStrategy, with a 155% year-to-date increase.

Padding Up With Bitcoin

Despite being four years in, MicroStrategy is not letting up on its Bitcoin purchases, with major purchases this year. In 2024 alone, the company has bought 63,079 BTC which cost around $4.04 billion to acquire. The most recent purchase was on September 20, when former CEO Michael Saylor announced that the company had purchased 7,420 BTC for $489 million. This has brought the company’s total BTC holdings to 252,200 for a whopping cost price of $9.9 billion.

Despite the already massive Bitcoin holding, accounting for more than 1.166% of the total supply, MicroStrategy plans to continue buying BTC. The company announced it was offering $700 million in convertible notes, which was later amended to $1 billion, the proceeds of which would be used to purchase more BTC.

As for the company’s plan for its massive BTC stash, Saylor has previously revealed that the company has no plans of selling soon. For now, the plan looks to be to buy as much BTC as possible to hold as a treasury asset.

MicroStrategy Invests Additional $458 Million In BTC

Of the funds raised, MicroStrategy allocated $458 million to purchase additional Bitcoin between September 13 and September 19, further bolstering its position as the cryptocurrency’s largest publicly traded corporate holder. As of September 19, the company reported holding approximately 252,220 Bitcoin, valued at around $15.8 billion. 

The convertible notes issued by MicroStrategy carry an interest rate of 0.625% and will mature in 2028. This marks the fourth time this year that the company has turned to the convertible note market to finance its Bitcoin acquisitions. 

In conjunction with the new issuance, MicroStrategy is redeeming $500 million of higher-interest 6.125% notes due in 2028, reflecting a strategic shift to lower borrowing costs while expanding its crypto portfolio.

Co-founder and Chairman Michael Saylor has played a pivotal role in shaping MicroStrategy’s identity as a cryptocurrency investment vehicle since the company first ventured into Bitcoin in 2020. 

Under his leadership, the firm has transformed from a traditional enterprise software maker into a de facto crypto hedge fund, demonstrating a bold commitment to digital assets amid market fluctuations.

MicroStrategy’s stock has also seen significant gains this year, more than doubling in value and outperforming Bitcoin’s approximately 50% increase over the same period. The latest acquisition follows MicroStrategy’s earlier purchase of 18,300 Bitcoin, valued at roughly $1.11 billion last week.

Bitcoin Price Analysis

Following what has been deemed a bullish catalyst, the broader cryptocurrency market has responded positively to the US Federal Reserve’s announcement on Wednesday of a 0.50% basis point rate cut. 

This decision contributed to the recovery over the past week after Bitcoin’s price retraced to as low as $52,640 on September 6. Bitcoin has managed to reclaim the $63,000 mark, aiming to consolidate above this critical level for the last 24 hours. 

Market analyst Ali Martinez points out that this price point coincides with Bitcoin’s 200-day simple moving average (SMA) on its BTC/USDT daily chart, which Martinez identifies as a pivotal threshold for the anticipated bull run in the latter part of the year.

Historically, failures to maintain this support level have led to significant corrections, as observed in 2020, 2018, and 2014. Martinez warns that a rejection at this level could signal trouble for Bitcoin’s future price trajectory.

To mitigate the risk of a sharp decline, key support floors have been spotted at $61,700 in the short term, with the $60,000 mark serving as an essential threshold to prevent further price drops. 

In addition, introducing new liquidity into the market could significantly boost the Bitcoin price, as the Fed’s decision may boost investor confidence in riskier assets such as BTC. 

A successful break and consolidation above $63,000 could set the stage for a potential challenge of the next resistance level at $64,000 in the coming days.

Featured image from DALL-E, chart from TradingView.com