TLDR
- Michael Saylor’s Bitcoin strategy has delivered a 1,202% return on MSTR stock since its adoption in August 2020.
- MSTR stock has consistently outperformed Bitcoin, gold, and other major assets, according to Saylor’s chart.
- Strategy currently holds 709,715 BTC, valued at $63.1 billion, with a modest 17% unrealized profit on its Bitcoin holdings.
- The market cap of MSTR is $46 billion, and its enterprise value stands at $61 billion, trading at a premium to Bitcoin’s fair value.
- MSTR’s stock performance is influenced by sentiment, leverage, and expectations of continued Bitcoin accumulation.
Michael Saylor has made a compelling case for his Bitcoin strategy, showing an impressive 1,202% return on Strategy stock (MSTR) since adopting the Bitcoin Standard in August 2020. This performance has outpaced Bitcoin’s own 650% gain in the same period. Saylor’s success is impossible to ignore as he continues to push the narrative that his Bitcoin strategy has worked remarkably well for his company.
MSTR Stock: A High-Beta Bitcoin Proxy
Since August 2020, MSTR has proven itself as a high-beta Bitcoin proxy, significantly outperforming traditional market assets. Saylor posted a chart comparing MSTR’s returns to Bitcoin, gold, QQQ, SPY, real estate, and bond benchmarks. The results show that MSTR has consistently outperformed these asset classes, reinforcing the belief that it is an excellent Bitcoin proxy.
In fact, Strategy now holds a staggering 709,715 BTC, worth approximately $63.1 billion. The average purchase price of Bitcoin for MSTR is $75,974, giving the company a modest 17% unrealized profit on its Bitcoin holdings. This performance has shown that MSTR remains a solid bet for investors looking to gain exposure to Bitcoin without directly owning the digital currency.
Bitcoin Strategy and Market Valuation
While MSTR’s stock performance has been impressive, its market valuation presents a more complicated picture. The company’s basic market cap stands at $46 billion, with an enterprise value of $61 billion. Despite holding over $63 billion in Bitcoin, MSTR trades at a premium compared to the fair market value of its BTC holdings, raising questions about its valuation.
The price of MSTR’s stock is influenced by various factors, including sentiment, leverage, and expectations of further Bitcoin accumulation. NAV multipliers for MSTR range between 0.729 and 0.964, depending on the method used. This reflects the market’s belief in Saylor’s ability to continue building his Bitcoin position, driving the company’s stock price higher.
Risks and Potential for Further Growth
Looking at the long-term price movements of MSTR and Bitcoin, the two assets tend to move in tandem. MSTR has often outperformed Bitcoin during bullish cycles, followed by sharp declines. However, since late 2022, MSTR has once again been consistently outperforming Bitcoin, indicating that the market is optimistic about its prospects.
Saylor has previously stated that Bitcoin could reach $250,000 in this cycle, and if that occurs, MSTR could double from its current levels. However, if Bitcoin fails to reach the $100,000 mark or falls below $60,000, MSTR’s stock could see a sharp decline. A drop in Bitcoin’s price, combined with any decision to sell BTC from Strategy’s holdings, could lead to a decline in MSTR’s value, potentially bringing it down to $40 to $45 per share.
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