MicroStrategy outperforms nearly every US stock with 480% yearly gain thanks to Bitcoin

MicroStrategy (MSTR) is on a tear, blowing past nearly every other stock in the U.S. with a 480% surge this year, thanks to one relentless strategy: buying Bitcoin like there’s no tomorrow.

The company has turned its balance sheet into a fortress of digital gold, and the results are clear. Today, it joins the Nasdaq 100, an epic comeback for a company that nearly faded into obscurity in the 2000s.

MicroStrategy has also dropped $561 million to buy another 5,262 Bitcoins less than an hour ago, which tracks per its recent purchase pattern. Right now, its total holdings are 444,262 coins, worth around $43 billion.

Michael Saylor, the company’s founder and executive chairman, has transformed MicroStrategy into the ultimate Bitcoin play, catapulting its market cap from $1.1 billion in 2020 to $82 billion today. And it only took him four years.

From dot-com crash to Bitcoin boom

MicroStrategy started out as a software company specializing in business intelligence, riding the dot-com wave to a flashy Nasdaq debut in 1998. Saylor, then 33, stayed in a penthouse suite at the Lotte New York Palace in Manhattan on the eve of the IPO, courtesy of lead underwriter Merrill Lynch.

The next morning, he watched as MicroStrategy’s stock popped 76% on its first day, with Nasdaq issuing a special ticker warning: “Please do not confuse MSTR with MSFT,” the latter being Microsoft. The good times didn’t last.

The dot-com bust obliterated MicroStrategy’s value, and the company spent the next two decades clawing its way back with steady software revenue, generating around $100 million per quarter.

But in 2020, Saylor decided to go all in on Bitcoin. He bet the company’s future on the apex crypto, calling it “the next technology wave.” Critics called him reckless. Saylor didn’t care. By mid-2020, MicroStrategy began borrowing money and issuing stock to fund the Bitcoin purchases.

Today, it’s the fourth-largest Bitcoin holder in the world, behind only Bitcoin’s creator Satoshi Nakamoto, BlackRock’s iShares Bitcoin Trust, and Binance.

Not everyone is cheering though. Predictably, Peter Schiff, a proud Bitcoin hater, mocked Saylor’s strategy on X (formerly Twitter), writing, “Wash, rinse, repeat—what could possibly go wrong?”

But for MicroStrategy, the numbers speak for themselves. This year’s surge follows a 346% gain in 2023.

Trump, Bitcoin, and Wall Street’s crypto frenzy

Donald Trump’s election victory poured gasoline on an already raging crypto fire. Backed by heavy funding from the crypto industry, Trump promised to make the U.S. the “crypto capital of the planet.”

Since his win, Bitcoin has climbed 41%, BlackRock’s Bitcoin ETF is up 39%, and MicroStrategy’s stock has jumped 60%, finally surpassing its dot-com-era high from 2000.

In July, at the largest Bitcoin conference of the year in Nashville, Trump pledged to fire SEC Chair Gary Gensler, an outspoken crypto critic, and replace him with deregulation advocate Paul Atkins.

Trump also named venture capitalist David Sacks as the White House A.I. and Crypto Czar, doubling down on his commitment to the industry. “Taxes are coming down,” Saylor said after Trump’s victory. “All the hostility from regulators to banks touching Bitcoin is gone.”

In December, he pitched Microsoft shareholders on adopting Bitcoin, urging the tech giant to invest some of its $78.4 billion in cash and equivalents into the crypto. “Microsoft can’t afford to miss the next technology wave, and Bitcoin is that wave,” Saylor declared in a video presentation.

The pitch didn’t land. Less than 1% of Microsoft shareholders supported the move. But for Saylor, the rejection was just another opportunity to preach Bitcoin’s merits. He has long been an evangelist for the OG crypto, co-authoring a book in 2022 titled What is Money?

Critics of his style say his approach resembles a cult.

ETFs, institutional access, and what’s next

Until this year, MicroStrategy was one of the few ways institutions could gain exposure to Bitcoin. As an equity, it didn’t require special regulatory provisions, making it a convenient proxy for Bitcoin investments. 

That changed in January when the SEC approved spot Bitcoin ETFs, allowing investors to buy funds that directly track Bitcoin’s value.

Despite the competition, MicroStrategy remains a favorite on Wall Street. Its stock is a pure Bitcoin play, and its performance has tracked the cryptocurrency’s rise almost perfectly. With Trump’s victory and a wave of deregulation on the horizon, Saylor believes the entire crypto market is set for explosive growth.

“With the red sweep, Bitcoin is surging up with tailwinds, and the rest of the digital assets will also begin to surge,” he said.

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