MicroStrategy Stock: How Correlated Is It to Bitcoin Price?
• MicroStrategy currently owns 152,800 Bitcoin, which is 0.79% of the circulating supply.
• Since their first purchase in August 2020, there has been a strong correlation between MicroStrategy’s stock price and the price of Bitcoin.
• MicroStrategy’s Bitcoin holdings are significant – they own 15.3% of all coins created since they started buying.
Microstrategy: A Background
Google “MicroStrategy” and Wikipedia will tell you that it is “an American company that provides business intelligence, mobile software, and cloud-based services”. That may technically be true, but in reality it has become a Bitcoin investment vehicle.
The Holdings of Microstrategy
MicroStrategy, under the borderline-religious leadership of Michael Saylor, currently owns 152,800 Bitcoin. That is 0.79% of the circulating supply; in other words, 1 in every 127 Bitcoin is now owned by MicroStrategy. When omitting the portion of the Bitcoin supply which is lost (for which estimates generally come in at about 1.5 million), the company owns 1 in every 118 coins. Furthermore, since their first purchase on August 8th 2020 there have been just over one million coins created – meaning their stash equates to 15.3% of all coins created since then!
Performance Vs Bitcoin
It’s unsurprising that there has been a strong correlation between MicroStrategy’s stock price and the price of Bitcoin since they began buying up the supply – bar a brief dip last year this relationship remains extremely strong today!
Additional Risks
Despite this correlation however there are additional risks to investing in this stock – not least because it violates the ’not your keys not your coins‘ mantra for investors unable to purchase bitcoin directly themselves!
Centralization Of Wealth?
With such an impressive proportion of bitcoin owned by one entity also comes concern about centralisation of wealth – could this lead to potential manipulation or mismanagement?
