Microstrategy’s Bitcoin bet will increase the stock by more than 300% by 2023

Business intelligence and software company MicroStrategy continues to go from strength to strength, largely on the back of its huge gamble on Bitcoin. Investors have also seen huge returns in the company's shares this year as crypto markets recovered.

This year, MicroStrategy is one of the top-earning companies in the United States by share price among companies valued at $5 billion or more.

Microstrategy pays Bitcoin bets

On December 26, CNBC reported that unlike its tech peers, whose stock price is based on revenue growth and market share, “microstrategy investor appeal is limited to bitcoin.

Moreover, MicroStrategy stock has risen by 317% so far this year, far surpassing Bitcoin, which has only gained 156%. According to MarketWatch, MSTR was trading at $605 after hours on December 26.

It has surpassed tech giants like Nvidia, Meta, Apple, Microsoft and Google.

BTC is the secret of the company's success. He started buying crypto assets in mid-2020 and has since accumulated about 174,530 BTC. This is the largest corporate holding of Bitcoin, valued at around $7.36 billion.

“It's definitely Bitcoin,” stock analyst Joseph Vaffy told the market before adding:

“Everything else is healthy and doing a good job, they just don't ignore it. It is working well, leading the software in the field. But basically it's nothing to worry about.

Read more: What is Dollar-Cost Averaging (DCA)?

Moreover, MicroStrategy's market value is $8.5 billion, which means that 86% of its value is directly related to BTC holdings.

Former CEO Michael Saylor has created a way for investors to get exposure to BTC without buying it directly.

Vaffy described Saylor as “kind of visionary” before adding:

“He saw this as an opportunity to exploit the fact that they had a lot of money and a proper ledger and start this Bitcoin treasury experiment. And it worked out well and they continued that way.”

ETF competition?

However, spot Bitcoin ETFs could create competition for the microstrategy model if they are adopted in January.

However, Vaffy sees it as a good thing because ETFs will drive up the value of BTC, which is great news for MicroStrategy.

Last week, Saylor said that the potential approval of a Bitcoin ETF could be the biggest development on Wall Street in 30 years.

Furthermore, the company has no intention of reducing its Bitcoin reserves. In November, it made its biggest purchase since 2021 with an additional 16,130 BTC for $593 million.