MicroStrategy, the largest publicly traded corporate holder of Bitcoin, has seen its stock surge by a massive 94% year-to-date (YTD), driven by Bitcoin’s rally above $97,000.
With 331,200 Bitcoin (BTC) on its balance sheet, valued at around $32 billion, MicroStrategy has $15.51 billion in unrealized gains, according to Dropstab data.
According to the MSTR Tracker performance comparison chart, which compares MicroStrategy to other major tech stocks, only Nvidia outpaced MSTR with a 180% increase YTD.
The rise in MicroStrategy’s stock reflects increasing integration of cryptocurrencies into traditional finance and growing investor demand for Bitcoin-backed equities.
Chart depicting the portfolio value of MicroStrategy’s BTC holdings and $15 billion in unrealized profit. Source: Dropstab
Related: MicroStrategy’s market cap on track to top Intel’s
Performance beyond crypto
While BTC’s rise in price has performed incredibly well through 2024, MicroStrategy’s stock has also soared through the year, as indicated in the performance comparison chart below.
MicroStrategy’s year-to-date performance has surpassed major tech stocks, including Apple by 21%, Amazon by 24% and Tesla by 6%.
As a BTC proxy and a technology company, MicroStrategy’s enterprise analytics business continues to perform well in close association with BTC. Still, this valuation could change quickly if a crypto market downturn should occur.
Performance Comparison against Common Benchmarks chart depicting MSTR stock rising 94% YTD. Source: MSTR Tracker
Related: MicroStrategy increases note sales to $2.6B for Bitcoin purchases
Risks of overreliance on BTC
Despite strong performance, MicroStrategy’s reliance on Bitcoin exposes it to market volatility. A significant drop in Bitcoin’s price could quickly erode the company’s valuation and stock price.
The firm’s net asset value premium, currently at 3.3x, reflects speculative enthusiasm, which could signal potential volatility.
As the price of BTC approaches $100,000, some analysts warn that potential profit-taking could be on the horizon, as profit-taking “remains below historical peaks.”
Chart depicting BTC’s rise in price over the period of a year as it approaches $100,000. Source: CoinMarketCap
Related: Michael Saylor to pitch Microsoft board on Bitcoin buying strategy
MicroStrategy set to exceed Intel
MicroStrategy’s market capitalization surpassed $100 billion on Nov. 19. Analysts expect further gains as the company’s Bitcoin acquisition strategy accelerates.
In light of this milestone, the de-facto BTC fund is now on track to exceed the market cap of chip maker firm Intel, with its $102 billion market cap as of Nov. 20.
CEO Michael Saylor recently announced an opportunity to present a three-minute pitch to Microsoft’s board of directors about the benefits of investing in Bitcoin.
Magazine: Crypto has 4 years to grow so big ‘no one can shut it down’: Kain Warwick, Infinex