Originally published on: August 11, 2024
MicroStrategy made a groundbreaking decision on Aug. 10, 2020, by diving into the world of Bitcoin and becoming the first publicly-traded company to embrace the cryptocurrency as its primary treasury reserve asset. Fast forward four years, and this bold move has not only paid off but has also surpassed the traditional investment wisdom of Warren Buffett’s Berkshire Hathaway.
MicroStrategy’s Bitcoin Stash and Stellar Growth
As of Aug. 10, 2024, MicroStrategy holds a whopping 226,500 BTC in reserves, valued at $13.771 billion, acquired at an average cost of around $37,000. With Bitcoin’s current price hovering around $60,500, MicroStrategy finds itself with unrealized profits of approximately $5.39 billion.
Unwavering Confidence in Bitcoin
Despite the significant gains, MicroStrategy, under the leadership of Michael Saylor, remains steadfast in its Bitcoin strategy, opting to retain its accumulated assets without liquidation. The company’s commitment to accumulating Bitcoin was reaffirmed by its most recent purchase on Aug. 1.
Impressive Returns and Market Impact
MicroStrategy’s MSTR stock has witnessed an impressive surge of about 1,000% since August 2020, outperforming Bitcoin’s returns by 1.5 times and surpassing the S&P 500 index’s returns by a staggering 16.25 times within the same period.
Contrasting Performances: MSTR vs. BRK.A
In stark contrast to MicroStrategy’s success in the Bitcoin realm, Warren Buffett’s Berkshire Hathaway Class A stock, BRK.A, has lagged behind, registering only a modest gain of 104.75% since MicroStrategy’s initial Bitcoin foray. Buffett’s steadfast aversion to Bitcoin has prevented Berkshire from exploring cryptocurrency investments.
Buffett’s Bitcoin Skepticism
Buffett’s infamous “rat poison squared” remark about Bitcoin in 2018, echoed by his late associate Charlie Munger’s prediction of Bitcoin’s price crashing to zero, stand in stark contrast to MicroStrategy’s thriving Bitcoin strategy.
Outperforming Buffett’s Top Holdings
Interestingly, both Bitcoin and MicroStrategy have outshined Buffett’s top stock holdings like Apple, American Express, and Bank of America in recent years, showcasing the power and potential of alternative investments.
Voice of Skepticism
Despite MicroStrategy’s remarkable success, some traders have expressed skepticism towards the MSTR stock. Investment firm Kerrisdale Capital argues that the stock is trading at an “unjustifiable premium” to Bitcoin, with Sahm Adrangi, chief investment officer at Kerrisdale Capital, highlighting the disparity between the stock’s actual value and its perceived worth.
In conclusion, MicroStrategy’s bold Bitcoin strategy continues to defy critics and traditional investment norms, demonstrating the dynamic landscape of the modern financial market.
