On Friday, MicroStrategy’s share price surged 16%, boosting its valuation to $43 billion, as traders predict a potential Bitcoin rally toward $100K. MicroStrategy, the largest corporate holder of Bitcoin, saw its stock price rise to $212.59 following a significant breakout past $190 last week. Analysts suggest the company’s strong performance could act as a “SpaceX-like” launchpad for Bitcoin’s price increase, drawing parallels to SpaceX’s recent successful test flight.
MicroStrategy’s stock has soared by 236% year-to-date, significantly outperforming Bitcoin’s 48.6% rise. Analysts believe this outperformance could contribute to a future Bitcoin rally, potentially driving its price to $100K.
However, opinions are divided. Bitcoin investor Fred Krueger warned that the premium on MicroStrategy’s stock might contract, causing substantial losses for investors if it reverts closer to its Bitcoin holdings’ value. He cautioned that investors could lose half their money if the premium drops without an increase in Bitcoin’s price.
On the other hand, Bitcoin advocate Rajat Soni defended MicroStrategy’s premium, explaining that the company benefits from issuing shares at a 2.7x premium to its Bitcoin holdings. This strategy allows the company to continuously purchase more Bitcoin, effectively giving shareholders a growing Bitcoin yield over time. As long as the BTC price rises and new share buyers are found, this cycle could persist.
In a recent interview, MicroStrategy’s founder and executive chairman, Michael Saylor, shared his vision to transform the company into a “Bitcoin bank.”
