It is not a secret how impressed I have been with Michael Saylor's bitcoin strategy. There were time many doubted MicroStrategy's pivot to bitcoin, and many criticized Michael Saylor for not focusing in the core business of the company instead. I haven't seen such strong conviction in one investment instrument by an individual or a company before. Some of the moves at time seemed very risky. MicroStrategy started out buying bitcoin with their reserve cash of half a billion dollars in treasury with intention of preserving its value. But then it quickly turned into something else. They started taking out loans and kept buying bitcoins. Any profits they make, they kept buying bitcoin. Then strategy shifted to creating more stock shares, selling them and buying more bitcoin. Price didn't matter. If they have access to cash, they buy bitcoins. Sometimes it is even hilarious. Just recently they bought 3000 more bitcoins. Soon MicroStrategy will own 1% of total bitcoins that will ever exist.
If there was any time to celebrate Saylor's vision and MicroStrategy's success, it would be today, March 1st, 2024. Only a month ago $MSTR was trading at $500 per share. Now the price of the stock is about $1022. In just one month price of $MSTR doubled. Of course there is a correlation with bitcoin's price action. Bitcoin had a great month as well. It's price went up from $42K to about $62K. Bitcoin's February 2024 candle on the chart represents $20k gains. That is about 50% increase, not necessarily doubling. If bitcoin did great in February, $MSTR did even better. While bitcoin and $MSTR prices kinda move in the same way, and mainly $MSTR's price movements depends on bitcoin's price movement, $MSTR outperformed bitcoin in last couple years, while bitcoin outperformed everything else.
I am sure there are other stocks and coins that may have performed slightly better than bitcoin or $MSTR in recent months. But the consistency is not comparable. NVIDIA had a great run in last several months. Even NVDIA didn't do as well as $MSTR in February. I am sure NVDIA will continue being a good investment and will play a big role in advancement of AI technologies. Today, I would like to celebrate MSTR's success.
MicroStrategy's primary strategy has always been to preserve the value of their assets and property. Secondary strategy was to become an investment instrument for those who do not have direct access to bitcoin due to various rules and laws. Idea is very simple. If you can't buy bitcoin directly from exchanges but are allowed to buy stocks, just buy MSTR which in return provides exposure to bitcoin. With the launch of bitcoin spot ETFs in January, almost a dozen competitors emerged for MicroStrategy's bitcoin strategy. Now, MSTR wasn't the only option for investors anymore. Now they could invest in bitcoin spot ETFs instead. However, it seems like interest in investing in MSTR has increased and not the other way around. Yes, ETFs are doing great. There obviously is a lot of interest in trading this instrument. But it doesn't seem like investors are abandoning MSTR anytime soon.
Prices go up, and go down. No price is permanent in the markets. It is quite possible by the beginning of next months or even next week, price of $MSTR will drop significantly. Same thing applies to bitcoin. We have seen many times how bitcoin's price can go down fast and a lot. In a long run though both bitcoin and $MSTR seem to do ok. Regardless of short term movements, it looks like Saylor's vision has been a great one, and the one many other business executives could learn from. In fact, Saylor has always been very open about his strategy and vision, and invited all business executives to take similar steps to preserve their company's assets. There was time when he even organized a conference where he shared his bitcoin strategy blueprint. Saylor has played a big role in demonstrating how companies can also participate in this decentralized network. What I liked most about Saylor and his bitcoin journey is his ability to explain bitcoin in simple terms. Saylor has served as CEO of MicroStrategy for very long time. He has education in astrophysics and engineering. Adding these qualities and his ability to articulate and explain complex topics in simple words for everybody to understand has been among his biggest contributions to bitcoin. He hasn't stopped buying bitcoin, and he hasn't stopped talking about bitcoin. He is super obsessed with bitcoin.
I have never bought $MSTR and not planning to buy in near future either. I prefer direct access to bitcoin and self custody. But if I were in a situation when my funds can't be used to buy bitcoin directly, but can buy stocks, I would definitely consider $MSTR. It seems this is the case for many various funds that have rules in place that doesn't allow the fund or its manager to buy bitcoin and crypto directly. But they have green light to buy any stocks in the market. For those who would want bitcoin exposure either as primary investment instrument or as a hedge, $MSTR seems to be a good option. Another thing to consider is that MicroStrategy has been creating shares to fund more bitcoin purchases. I would think that is suppose to dilute the value of outstanding shares. Surprisingly, the prices have been going up despite that fact. Perhaps, this strategy wasn't diluting but rather adding more value. For example, USD loses its purchasing power because FED keeps printing more and more. But the question is are the newly created dollars spent in a way to add value to the existing dollar holders or they are spent in a way that would lower the its value for those who already have them. I highly doubt FED or US government care about preserving dollar's value or purchasing power. They are more interesting in playing politics, spending without limitations, manipulating economies. Sometimes it looks like there is no logic for these actions. But anyway, MicroStrategy's actions seem to benefit the company and its investors so far. Will it continue to be like this in the future. I don't know. Ultimately, they too are centralized entity. If there is an option to directly participate in decentralized systems, that may be better.
Congratulations MicroStrategy, Michael Saylor, and MSTR investors. I would like to end this post with Saylor's recent words - "Stay Humble. Stack Sats."