MicroStrategy Shares Rise as Bitcoin Bet Pays Off

Enterprise software company MicroStrategy was a first-mover to adopt bitcoin on its balance sheet. The company made the move over a year ago, and it has paid off in spades as its bitcoin investment has ballooned in size.

Now that the bitcoin price has attained a fresh all-time high of more than $65,000, MicroStrategy’s stock is rallying too. Shares of MicroStrategy increased 4.2% on Wednesday to $758. So far this year, the stock has nearly doubled. And over the past 12-month period, the stock has climbed more than 300%. In the same period, the bitcoin price has soared over 400%.

MicroStrategy’s stock reclaimed some lost ground after falling on Tuesday, the day that the ProShares bitcoin futures ETF started trading. MicroStrategy is considered another way for investors to play the cryptocurrency market, especially if they don’t want to take the plunge into bitcoin just yet.

Bitcoin Portfolio

MicroStrategy owns more than 114,000 bitcoins on its balance sheet. The value of the investment has about doubled in size from approximately $3 billion to over $6 billion. And according to MicroStrategy CEO Michael Saylor, the company is holding tight.

MicroStrategy is not the only company with bitcoin on its balance sheet. A year ago, Jack Dorsey’s payments company Square followed suit. After pouring more than $200 million into bitcoin in total, Square’s holdings are valued at $530 million, reports indicate.

Now Square is exploring the launch of a bitcoin mining operation, which is the process by which new coins are created and the network is secured. A recent tweet by Dorsey of the number “705742” has the cryptocurrency community convinced that it is bitcoin related, though the Square and Twitter CEO is keeping his cards close to the vest.

More Potential Gains Ahead

Both MicroStrategy and Square could potentially ride the crypto wave higher next week when a second bitcoin futures ETF is expected to make its debut. The VanEck Bitcoin Strategy ETF, which will trade under the ticker symbol XBTF, has received the regulatory clearance to begin trading in the coming days.

 

The investment management firm is also waiting on pins and needles for the U.S. SEC’s verdict on a VanEck “physical bitcoin” ETF, a decision that according to director Gabor Gurbacs is expected in November.