Cryptocurrency Opinion and Analysis

4 years in, MicroStrategy’s Bitcoin gamble beats Warren Buffett’s warning

2024.08.11 10:05

MicroStrategy purchased its first Bitcoin (BTC) stash on Aug. 10, 2020, becoming the first public-traded company to adopt the cryptocurrency as its primary treasury reserve asset. Four years later, the bold move has evolved into a defining strategy for the company that has outpaced even the returns of Warren Buffett’s Berkshire Hathaway.

MicroStrategy nets $5.38B in Bitcoin profits

As of Aug. 10, 2024, MicroStrategy had 226,500 BTC worth $13.771 billion in reserves, which it acquired at an average cost of around $37,000. With Bitcoin currently trading at approximately $60,500, MicroStrategy is now sitting on unrealized profits of about $5.39 billion.

4 years in, MicroStrategy’s Bitcoin gamble beats Warren Buffett’s warningMicroStrategy’s Bitcoin purchases throughout the history. Source: SaylorTracker.com

Despite the substantial gains, Michael Saylor’s company has maintained its Bitcoin holdings, choosing not to liquidate any of its accumulated assets. It has expressed its intention to continue accumulating Bitcoin, further evidenced by its most recent purchase on Aug. 1.

Michael Saylor is beating legendary Warren Buffett

The value of MicroStrategy’s MSTR stock has responded bullishly to its Bitcoin purchases, having surged by around 1,000% since August 2020. In comparison, that is 1.5 times higher than BTC’s returns and 16.25 times higher than the returns of the S&P 500 (SPX) index in the same period. 

4 years in, MicroStrategy’s Bitcoin gamble beats Warren Buffett’s warningMSTR versus BTC/USD and SPX performance since August 2020. Source: TradingView

Interestingly, Warren Buffett’s Berkshire Hathaway Class A stock, BRK.A, has significantly underperformed compared to MSTR since MicroStrategy’s initial Bitcoin purchase. BRK.A has only gained 104.75% during this period, with Buffett’s persistent negative stance toward Bitcoin keeping Berkshire from exploring crypto investments.

Related: Warren Buffett’s Berkshire Hathaway did crash 99%… against Bitcoin since 2015

In 2018, Buffett called Bitcoin a “rat poison squared.” His close associate, the late Charlie Munger, went a step further and predicted that BTC’s price would crash to zero, calling it a disgusting product, in his statement in 2021. 

Still, Bitcoin and MSTR have performed better than Buffett’s top stock holdings, namely, Apple, American Express, and Bank of America, in recent years.

4 years in, MicroStrategy’s Bitcoin gamble beats Warren Buffett’s warningMSTR vs. BRK.A, AAPL, BAC, and AXP returns since August 2020. Source: TradingView

However, some traders have expressed their intentions to short the MSTR stock, with investment firm Kerrisdale Capital argying that it is trading at “unjustifiable premium” to Bitcoin.

“The software business is worth a billion, maybe a billion [point] five, somewhere in between — it’s not worth very much,” Sahm Adrangi, chief investment officer at Kerrisdale Capital, told Cointelegraph, adding:

“Bitcoin prices have to go up for the value of the company to increase. If they go down the value of the company goes down. The company should be trading at the value of Bitcoin. Our argument is ‘go short MicroStrategy, go long Bitcoin.” 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 101,980.32 2.56%
ethereum
Ethereum (ETH) $ 3,246.25 2.48%
xrp
XRP (XRP) $ 2.98 3.51%
tether
Tether (USDT) $ 0.999931 0.03%
solana
Solana (SOL) $ 227.55 4.49%
bnb
BNB (BNB) $ 671.26 1.64%
usd-coin
USDC (USDC) $ 1.00 0.01%
dogecoin
Dogecoin (DOGE) $ 0.324643 1.87%
cardano
Cardano (ADA) $ 0.930444 4.20%
staked-ether
Lido Staked Ether (STETH) $ 3,243.44 2.34%
tron
TRON (TRX) $ 0.25383 0.21%
chainlink
Chainlink (LINK) $ 24.77 3.03%
avalanche-2
Avalanche (AVAX) $ 33.84 3.35%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,869.99 2.25%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 102,069.35 2.31%
stellar
Stellar (XLM) $ 0.408481 3.61%
sui
Sui (SUI) $ 3.97 5.56%
the-open-network
Toncoin (TON) $ 4.83 1.57%
hedera-hashgraph
Hedera (HBAR) $ 0.300579 5.01%
shiba-inu
Shiba Inu (SHIB) $ 0.000019 0.84%
polkadot
Polkadot (DOT) $ 6.34 0.81%
weth
WETH (WETH) $ 3,248.53 2.38%
litecoin
Litecoin (LTC) $ 124.39 5.61%
leo-token
LEO Token (LEO) $ 9.78 0.22%
hyperliquid
Hyperliquid (HYPE) $ 26.40 3.96%
bitcoin-cash
Bitcoin Cash (BCH) $ 424.11 2.72%
bitget-token
Bitget Token (BGB) $ 6.89 0.03%
usds
USDS (USDS) $ 0.999905 0.14%
uniswap
Uniswap (UNI) $ 11.37 5.20%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,437.28 2.28%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.07%
pepe
Pepe (PEPE) $ 0.000013 1.75%
near
NEAR Protocol (NEAR) $ 4.48 4.97%
mantra-dao
MANTRA (OM) $ 5.33 4.30%
aave
Aave (AAVE) $ 313.49 3.49%
official-trump
Official Trump (TRUMP) $ 23.30 10.86%
ondo-finance
Ondo (ONDO) $ 1.44 7.38%
monero
Monero (XMR) $ 238.54 1.95%
internet-computer
Internet Computer (ICP) $ 9.05 2.85%
aptos
Aptos (APT) $ 7.41 8.71%
mantle
Mantle (MNT) $ 1.22 1.39%
whitebit
WhiteBIT Coin (WBT) $ 28.23 0.61%
ethereum-classic
Ethereum Classic (ETC) $ 26.31 1.77%
vechain
VeChain (VET) $ 0.046957 0.92%
bittensor
Bittensor (TAO) $ 426.36 7.41%
crypto-com-chain
Cronos (CRO) $ 0.128064 3.51%
dai
Dai (DAI) $ 1.00 0.01%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.401823 3.69%
kaspa
Kaspa (KAS) $ 0.127659 3.62%
okb
OKB (OKB) $ 52.22 5.05%