The largest owner of cryptocurrencies in the world
Bitcoins worth $17 billion were collected by MicroStrategy. It is the largest holder of this cryptocurrency and has become a rising star of the American stock exchange. Stock market investors seem hypnotized by the strategy of the American company.
The MicroStrategy share price has already increased by over 250% this year. From $70 to $220. This company is known, but it concerns people interested in cryptocurrencies when it decided to change its strategy from 2020.
– This change in strategy was related to MicroStrategy’s adoption of bitcoin to its reserves, and before this decision its share price was at $20. – says Maksymilian Kuch, XTB stock market analyst, in an interview with MarketNews24. – So we are dealing with an almost 11-fold increase in the price and an increase in capitalization to USD 45 billion.
What’s next for bitcoin?
The further development vision is that the company wants to be a bitcoin bank, granting loans to other institutions, thanks to the fact that the company has so much capital available in bitcoin. That’s 226.5 thousand. bitcoins. Experts estimate that there is no corporation in the world that has more bitcoins.
It is possible that MicroStrategy will decide to act like private equity, using reserves denominated in the dollar but based on bitcoin. The company can allocate part of its reserves to M&A transactions to buy companies, build their value and sell them after a few years.
The company quickly accumulates capital not only from share capital, but also from the bond market that MicroStrategy issues.
– MicroStrategy is like a snowball that collects more and more capital, because when the company’s valuation increases in relation to the valuation of bitcoins, MicroStrategy issues more shares – explains the XTB expert. – The company uses the capital obtained from the issue of shares to purchase further bitcoins.
The company operates similarly on the bond and debt securities market with the possibility of converting them into shares. It works like a “machine” for raising capital on the traditional financial market to transfer this capital to the cryptocurrency market.
A strategy based on the assumption that the value of bitcoin will increase
The company plans to increase the number of bitcoins held by 4-8% every year. This year it has doubled those expectations (up 17%).
It is attractive to investment funds and pension funds that cannot invest in Bitcoin ETFs due to regulatory obligations. However, they can do it indirectly by purchasing MicroStrategy “securities”.
– The company’s strategy is based on the assumption that the value of bitcoin will increase – comments M.Kuch from XTB. – Buying its shares is therefore even more risky than buying bitcoin itself. The movement in Bitcoin’s price is already causing even greater changes in MicroStrategy’s stock price.
Already in December this year, the company may be added to the Nasdaq100 index, and in the longer term it may appear in the S&P500 index.
