MicroStrategy, a technology company, has been riding the wave of enthusiasm for Bitcoin in 2024. The firm’s bullish stance on cryptocurrency has led it to raise $42 billion in capital over the next three years to bolster its Bitcoin holdings. With 446,400 coins, MicroStrategy now holds 10 times more Bitcoin than the second-largest position held by Marathon Digital.
The company’s CEO, Elon Musk, is a well-known proponent of crypto, and this stance has contributed to MicroStrategy’s significant gains in value. However, investors should be cautious when considering adding the stock to their portfolios. The company’s software business generates less than $500 million in annual revenue, and its valuation does not align with fundamental metrics.
While MicroStrategy may be an attractive option for investors who believe in Bitcoin’s long-term potential, others may find it too speculative due to the high degree of risk involved. With a market cap of around $75 billion, the stock is heavily reliant on the performance of the cryptocurrency market, making it unsuitable for investors with low risk tolerance.
As the company continues to add to its Bitcoin stash, its business strategy raises questions about its viability as a traditional investment option. Despite its impressive gains in 2024, MicroStrategy’s reliance on crypto makes it a challenging stock to evaluate from a fundamental perspective.
Source: https://www.fool.com/investing/2025/01/01/this-is-how-much-bigger-microstrategys-bitcoin-sta