MicroStrategy became the first publicly traded company to adopt cryptocurrency as a primary treasury reserve asset when it purchased its first Bitcoin (BTC) on August 10, 2020. Four years later, this bold move has evolved into a defining strategy for the company, outpacing the returns of Warren Buffett’s Berkshire Hathaway.
MicroStrategy Earns $5.38 Billion in Bitcoin
As of August 10, 2024, MicroStrategy owned 226,500 BTC worth $13.771 billion, which it acquired at an average cost of $37,000. With Bitcoin currently trading at around $60,500, MicroStrategy currently has an unrealized profit of around $5.39 billion.
Despite the significant gains, Michael Saylor’s company has maintained its Bitcoin holdings and has decided not to liquidate its accumulated assets. The company has expressed its intention to continue accumulating Bitcoin, which is further evidenced by its most recent purchase on August 1.
Michael Saylor Beats Legendary Warren Buffett
MicroStrategy’s MSTR stock value has reacted strongly to Bitcoin buying, soaring by about 1,000% since August 2020. By comparison, this is 1.5x the return of BTC and 16.25x the return of the S&P 500 (SPX) index over the same period.
Interestingly, Warren Buffett’s Berkshire Hathaway Class A stock BRK.A has significantly underperformed MSTR since MicroStrategy first bought Bitcoin. BRK.A is up only 104.75% over that period, and Buffett’s continued negative stance on Bitcoin has prevented Berkshire from exploring cryptocurrency investments.
Related: Warren Buffett’s Berkshire Hathaway Is Down 99% on Bitcoin Since 2015
In 2018, Buffett called Bitcoin “rat poison squared.” His close colleague, the late Charlie Munger, went even further, calling it a disgusting product in a 2021 statement, predicting that the price of Bitcoin would crash to zero.
Nonetheless, Bitcoin and MSTR have outperformed Buffett’s major holdings Apple, American Express and Bank of America in recent years.
However, some traders have expressed a willingness to short MSTR shares, with investment firm Kerrisdale Capital arguing that the stock is trading at an “unjustifiable premium” to bitcoin.
“The software business is worth a billion, maybe a billion (. 5) dollars, somewhere in between. It’s not that big of a valuation,” Sahm Adrangi, chief investment officer at Kerrisdale Capital, told Cointelegraph, adding:
“The Bitcoin price has to go up for the company to be worth more. If the price goes down, the company’s value goes down. The company has to trade at its Bitcoin value. Our argument is ‘MicroStrategy short, Bitcoin long.'”
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.