Bitcoin hits $60k, MicroStrategy stock soars on Bitcoin buy

Jacob Wolinsky ValueWalk

The price of bitcoin continues to surge higher, blasting past $60,000 per token on Wednesday, up some 5.5% as midday Eastern approached. One of the major catalysts is the record net inflows into the recently launched spot bitcoin exchange-traded funds (ETFs), as we wrote about Tuesday.

Since the 11 spot bitcoin ETFs debuted on January 11, the price of bitcoin has jumped from about $43,000 to the current $60,000+ level — about 40%. This week alone, the price has climbed a staggering 16% from about $51,000 on Monday. The price of bitcoin is now closing in on its all-time high of almost $69,000, set in November 2021.

Another catalyst for the spike was likely a massive purchase by MicroStrategy (NASDAQ:MSTR), a business intelligence firm that is also the largest corporate owner of bitcoin.

MicroStrategy owns 193,000 Bitcoin

MicroStrategy, based in Tysons Corner, Va., offers AI-powered intelligence, data and workflow software solutions for businesses. However, in 2020, the company implemented a new corporate strategy of adopting bitcoin as its primary treasury reserve asset. Company officials said MicroStrategy was the first publicly traded company to adopt this strategy.

According to the company’s fourth-quarter earnings report, MicroStrategy held 190,000 bitcoin as of Feb. 5, valued at $5.93 billion or $31,224 per bitcoin. In the fourth quarter and into the current quarter, the company has been on a bitcoin buying spree.

“We acquired 31,755 additional Bitcoins since the end of the third quarter, marking the largest quarterly bitcoin holding increase in the last 3 years and the 13th consecutive quarter of adding more bitcoin on our balance sheet. We benefited from the significant increase in Bitcoin prices in Q4 and we also continued to leverage our strategic capital markets activities and cash on hand to accumulate more bitcoin and accrete incremental value for our shareholders,” said Andrew Kang, chief financial officer at MicroStrategy, in the earnings report.

Since that report came out on Feb. 6. MicroStrategy has bought another roughly 3,000 bitcoin, according to a Securities and Exchange Commission (SEC) filing posted on Feb. 26.

According to the SEC filing, MicroStrategy purchased approximately 3,000 bitcoins between Feb. 15 and Feb. 25 for $155.4 million at an average price of approximately $51,813 per bitcoin. The purchases were made using proceeds from the issuance and sale of shares and excess cash. After this purchase, the company now owns approximately 193,000 bitcoins valued at $6.09 billion, at an average purchase price of approximately $31,544 per bitcoin.

Stock price up 52% YTD

MicroStrategy stock has been on a tear this past week, popping another 10% on Wednesday to about $960 per share during Wednesday’s session. Since the close of the market last Friday, when it was trading at $687 per share, MicroStrategy stock is up by about 40% as of Wednesday. Year to date, it is up by about 52% as of Feb. 28.

In a recent interview with Bloomberg, MicroStrategy founder and Chairman Michael Saylor said the company’s bitcoin purchases will not subside.

“I’m going to be buying the top forever,” Saylor told Bloomberg.

He called bitcoin the “strongest asset class,” and he believes capital is going to keep flowing into it from other asset classes like gold, real estate, and stocks or the S&P 500.

“There’s just no reason to sell the winner to buy the losers,” Saylor added.

Author

Jacob Wolinsky

ValueWalk

Jacob Wolinsky is the founder of ValueWalk, a popular investment site. Prior to founding ValueWalk, Jacob worked as an equity analyst for value research firm and as a freelance writer. He lives in Passaic New Jersey with his wife and four children.

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