2021-06-23 08:00:00

MicroStrategy Bets Heavy on BTC as Altcoins Lack its Allure

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Bitcoin has been the growing center of attention over the past few months. Now, Bitcoin is featured on financial news sources at least a few times every day. As countries, companies, and investors still attempt to piece together the future of the revolutionary technology, the long-term BTC outlook seems better than ever.

While price continues as volatile as ever, large institutions continue to express interest in the asset class. Longtime Bitcoin supporter and MicroStrategy CEO, Michael Saylor is pushing for his company to buy as much BTC as possible. 

Microstrategy is All In

On Monday, MicroStrategy bought another 13,005 BTC, spending about $489 million. Now, Microstrategy owns a staggering 105,085 coins. At Bitcoin’s current price, this is over $3.5 billion. To put this into perspective, MicroStrategy’s market cap is currently $5.4 billion. This causes MicroStrategy’s stock to move very closely with the price of BTC

Source: TradingView

As seen above, MicroStrategy stock is up nearly 400% just this year, although it has come down a bit as BTC price has slid. Microstrategy owns by far the most bitcoin out of all US institutions, with Tesla trailing far behind. Even if Microstrategy’s regular business does not bring in a large profit, the major investment in BTC could propel MSTR stock through the roof. With so much depending on bitcoin’s price, Microstrategy investors are almost betting more on the success of the digital asset than actual business. 

Michael Saylor announced back in October that he personally owns over 17,000 BTC, which is now worth over $600 million. It would not be surprising if he has acquired more coins, but even with this number it is a major whale on the Bitcoin network. Not only is Saylor benefitting hugely through his personal investment, but also Microstrategy’s success with BTC. Being a huge BTC advocate, Saylor continues to assist large institutions with their digital asset needs. 

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Bitcoin is Not DOGE

After a tough month for cryptos in general, DOGE has seen more than its fair share of red. The coin that originally started as a joke gained huge hype and popularity, pushing the price to the “moon.” At one point in mid-May, DOGE price reached 70 cents. From there the price has dropped more than 65%, leading many to believe that the bubble has finally popped.

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The exciting, Elon Musk-incited bull market for DOGE may be over, but Bitcoin seems to just be hitting its stride. While Bitcoin has seen a downfall from the historic 60k price push in May, positive news surrounding the digital assets continues coming out.

Countries continuing to push for integrating BTC into their economies is a massive development for the cryptocurrency’s future. In addition, while many view China’s recent crackdown on crypto to be a bad sign, other investors believe this is extremely necessary for keeping the currency decentralized and becoming sustainable in the long term.

All in all, the recent BTC acquisition by MicroStrategy and the increased global adoption of the coin during a crypto crash tells us something. Bitcoin’s resilliance has never been more tested and proven – and the faith placed in BTC seems to be something that most altcoins will not be enjoying for a while at least.

Microstrategy is betting big that BTC will bring the company to new heights. The positive outlook for BTC makes Microstrategy’s recent purchase even more interesting. Do you think MSTR stock is a huge buy for Bitcoin believers? Will other large corporations follow Microstrategy in buying huge amounts of bitcoin? Let us know in the comments!

About the author

Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firms specializing in sensing, protection and control solutions.

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