MicroStrategy's Stock Surge Amid Bitcoin's Record Rise

The anticipation of increased institutional investment follows MicroStrategy's impending inclusion in the Nasdaq 100, effective December 23, 2024.

MicroStrategy (NASDAQ:MSTR) stock rose on Monday after announcing a $1.5 billion Bitcoin purchase.

The company acquired 15,350 Bitcoins between December 9 and December 15, at an average price of $100,386 per coin.

MicroStrategy now holds 439,000 Bitcoins, valued at about $47 billion.

MicroStrategy stock rose on Monday after announcing a $1.5 billion Bitcoin purchase.

MicroStrategy said on Monday that it acquired 15,350 Bitcoins between December 9 and December 15, at an average price of $100,386 per coin.

The latest purchase brings MicroStrategy's total Bitcoin holdings to 439,000 Bitcoins, valued at about $47 billion.

MicroStrategy stock closed at $408.67 on Friday, up 3.5% in pre-market trading on Monday.

The company's stock has gained over 527% year-to-date, and its market capitalization now stands at close to $100 billion, up from about $1.1 billion in August 2020.

MicroStrategy stock is also set to join the Nasdaq 100, effective December 23, with analysts predicting that the inclusion could lead to buying activity from funds and ETFs like the Invesco QQQ Trust (NASDAQ:QQQ), with estimates of at least $2.1 billion in shares to be purchased.

However, MicroStrategy's path to joining the S&P 500 index appears to be more challenging.

While the company meets the market capitalization requirement of at least $18 billion to be included in the S&P 500, analysts indicate that MicroStrategy's ongoing profitability concerns could affect its chances.

MicroStrategy has not posted a profit in recent quarters, which may impact its S&P eligibility.

Meanwhile, anticipation is building for increased institutional investment in Bitcoin, following MicroStrategy's impending addition to the Nasdaq 100.

The move is expected to generate significant buying activity from funds and ETFs, bolstering the demand for the apex cryptocurrency.

Moreover, future changes in accounting regulations for digital assets could provide a boost for MicroStrategy.

Starting January 2025, proposed rules from the Financial Accounting Standards Board (FASB) will allow companies to record gains from rising Bitcoin prices in their financial statements.

This shift in accounting treatment is set to improve the financial performance reporting for companies like MicroStrategy, which have faced challenges in recent quarters due to having to take impairment losses during periods when Bitcoin prices declined.

MicroStrategy's strategy of accumulating Bitcoin and paying no federal income taxes has garnered attention from investors and analysts alike.

The company's stock has soared to new highs in 2024, driven by the rising value of its Bitcoin holdings and the anticipation of increased institutional interest in digital assets.

MicroStrategy's Executive Chairman, Michael Saylor, has expressed confidence in Bitcoin, stating, “I'm sure that I will be buying Bitcoin at $1 million a coin—probably $1 billion a day of Bitcoin at $1 million a coin.”

MicroStrategy also tracks its Bitcoin growth relative to its diluted shares in a performance metric called Bitcoin Yield, which stood at 72.4% year-to-date as of December 15.