By
Bena Ilyas
April 25th, 2024
Saylor sees Bitcoin’s potential to soar even higher, especially once regulators approve financial firms’ Bitcoin spot ETF products.
MicroStrategy Inc (NASDAQ: MSTR), the software firm led by Executive Chairman Michael Saylor, has seen its shares surge by an astounding 246% in 2023.
Saylor attributes this success to Bitcoin (BTC), which has not only fueled MicroStrategy’s growth but also positioned the company to compete with tech giants like Apple Inc (NASDAQ: AAPL), Microsoft Corp (NASDAQ: MSFT), and others collectively known as the ‘Magnificent Seven’ tech stocks.
MicroStrategy Inc’s Shares and Bitcoin’s Rally
As of Thursday, MicroStrategy’s shares rose by another 6%, reaching approximately $492 per share. Simultaneously, Bitcoin, of which MicroStrategy holds billions of dollars worth, hit a yearly high of over $37,200, showcasing a year-to-date increase of 122%. The symbiotic relationship between MicroStrategy’s shares and Bitcoin’s value emphasizes the impact of the cryptocurrency on the company’s financial success.
Saylor, who has been an outspoken advocate for Bitcoin emphasized in a recent Fox Business interview that MicroStrategy is leveraging its substantial holdings of Bitcoin on its balance sheet to fuel the company’s growth.
He sees Bitcoin’s potential to soar even higher, especially once regulators approve financial firms’ Bitcoin spot ETF products. Notably, Bloomberg Intelligence strategists predict a 90% chance of approval by January 2024, adding further optimism to Saylor’s outlook.
Furthermore, Saylor explained how the combination of government-induced inflation and technology-driven deflation creates challenging conditions for companies outside the Magnificent Seven.
According to Saylor, the majority of companies struggle to maintain consistent and substantial growth, making it crucial to grow revenues and cash flows at an extraordinary pace to keep up with the industry giants.
MicroStrategy’s Journey toward BTC Investment
Realizing the competitive landscape, MicroStrategy decided in August 2020 to pivot towards a “high-growth digital monopoly”.
Saylor highlighted that Bitcoin emerged as the most promising asset, likening it to a high-tech dominant digital network growing at an impressive rate of 40% to 50% annually. MicroStrategy strategically invested in Bitcoin, and the decision has paid off handsomely, with the cryptocurrency continuing to exhibit substantial growth.
Saylor remains bullish on Bitcoin, citing the balance in its current supply and demand dynamics. He anticipates a surge in demand after the halving event in April, coupled with the potential approval of Bitcoin spot ETFs.
Saylor’s optimistic view aligns with other players in the digital asset sector, who predict Bitcoin could surpass $100,000, following historical patterns observed after previous halving events. The next halving event will reduce mining rewards from 6.25 BTC per block to 3.125 BTC
Historically, every halving has resulted in a significant increase in the price of Bitcoin in the months following. So it’s understandable that Bitcoin halving is usually met with great excitement. For example, just before the first halving in 2012, the price of Bitcoin was around $12. However, following the halving, the asset peaked at more than $1,200, representing a 9,900% increase.
The 2020 halving also precedes the ultimate surge of the coin to its All-Time High (ATH) above $69,000 in November 2021.