MicroStrategy Is Investing Big in Bitcoin. Should You?
Business intelligence company MicroStrategy (MSTR) invested another $1.5 billion into Bitcoin (BTC) over the last week. The company issued a statement to that effect as Bitcoin is on the rise.
Bitcoin is nearing $100K, with a price of $95,621 (BTC/USD) at the time of this writing. The token has climbed by 1.56% over the last 24 hours. In the last week, Bitcoin has climbed just 1.40%, slowing down considerably from its post-election highs.
Meanwhile, MicroStrategy’s stock price is up by 1.63% today, partly reflecting its Bitcoin investment. The company’s stock is up significantly this month. As the second largest holder of Bitcoin in the world, MicroStrategy’s success is now tied directly to how Bitcoin is doing. Since the beginning of November, the company has seen a stock price jump of nearly 48% thanks to the meteoric rise of Bitcoin.
Now, Silicon Valley venture capitalist Tim Draper thinks that Bitcoin could hit $250,000 by the end of next year. If that does happen, and MicroStrategy continues its strong Bitcoin investment, the company could benefit considerably.
Is Bitcoin a Sound Investment?
MicroStrategy seems to think being in the Bitcoin business is a good idea. They have been investing more and more over the past couple years in the crypto token. Their bets have paid off in a big way, but they struggled when Bitcoin was struggling this year as well. After Bitcoin took a prolonged tumble early on, after hitting an all-time high, analysts questioned MicroStrategy’s strategy. Now, it looks like they had a smart idea all along.
Bitcoin is poised to do very well in 2025. There are further Federal Reserve interest cuts planned, if the Fed keeps its plans in place for those cuts and the inflation rate continues to decline. Those cuts can help Bitcoin and the crypto market, since they indicate that the Fed is confident in the healthiness of the US economy.
However, the biggest boost for crypto and Bitcoin in particular is likely to come from US President-elect Donald Trump and his administration. If he really does create a national Bitcoin reserve as promised and he does rework the regulatory framework for cryptocurrency to encourage crypto development, then Bitcoin could skyrocket a couple more times in the next few years.
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