In June 1998, when MicroStrategy made its debut on the stock market, the trading hall was buzzing with chatter, punctuated by reminders for traders to distinguish between the similar stock ticker symbols of MicroStrategy and MicrosoftFast forward a quarter of a century, and once again, these two entities find themselves intertwined, albeit under vastly different circumstances.

MicroStrategy's co-founder and chairman, Michael Saylor, recently took the stage in front of Microsoft shareholders, advocating for a new financial strategy that involves investing a portion of Microsoft's substantial cash reserves—which currently exceed $784 billion—into BitcoinWith a firm belief that Bitcoin represents the next wave of technological advancement, he asserted, “Microsoft cannot afford to miss out on the upcoming technological tsunami that is Bitcoin.” Yet, his views resonated with less than 1% of Microsoft's shareholders who supported his proposal.

On the other hand, Saylor has diverted every resource of MicroStrategy into this strategy

Since mid-2020, the company has acquired an astounding 439,000 Bitcoins, estimated to be worth around $42 billion todayThis bold bet has significantly propelled MicroStrategy's market cap from a mere $1.1 billion in 2020 to approximately $82 billion today.

On a recent Monday, MicroStrategy publicly disclosed a recent acquisition of 5,262 Bitcoins for about $561 million, resulting in a staggering average price of $106,662 per coinThe company now holds a total of 444,262 BitcoinsIt's worth noting that MicroStrategy's primary focus has always been its business intelligence software, which has only generated quarterly revenues slightly exceeding $100 millionFollowing the dot-com bubble burst at the end of the 1990s, its stock plummeted, loss almost all of its value, but it has since gradually regrouped—primarily due to its Bitcoin investments.

In just four years of aggressive Bitcoin purchasing, MicroStrategy has ascended to become the fourth largest holder of Bitcoin globally, behind the elusive Bitcoin creator Satoshi Nakamoto, BlackRock's iShares Bitcoin Trust, and the cryptocurrency exchange Binance

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This revelation has led to the stock’s performance aligning closely with Bitcoin prices, where analysts have posited that investing in Bitcoin was a strategic move to safeguard the company’s reserve asset value, which has enhanced the attractiveness of MicroStrategy's stock.

Recent data reveals that MicroStrategy's stock has skyrocketed by 477% year-to-date, just behind AppLovin in the rank of technology companies in the United States with market capitalizations of $5 billion or moreNotably, the stock recorded a cumulative rise of 346% in 2023 aloneDespite the rebound beginning well before November, it was significantly powered by the ongoing bullish sentiment in the cryptocurrency sectorSince November 5, the stock price of MicroStrategy has surged by 60% and has crawled above its high watermark since 2000.

However, as Michael Saylor becomes more synonymous with Bitcoin, critics have emerged more vocally than ever

Detractors depict him as a "cult-like leader," asserting that his strategy resembles a "Ponzi scheme," in which funds are raised through stocks and bonds only to be reinvested back into Bitcoin to buoy MicroStrategy's stock price further, maintaining a perpetual cycle.

Min Jung, an analyst at Presto Research, pointed out potential risks in MicroStrategy's reliance on Bitcoin to fulfill its financial obligationsHe elaborated, “Currently, the favorable price trend of Bitcoin enables MicroStrategy to maintain a positive feedback loop—rising stock prices can increase financing options, which in turn can be leveraged for further Bitcoin acquisition, consequently inflating both Bitcoin’s price and the value of MicroStrategy's stockWhile this strategy may work during a bull market, its sustainability heavily depends on continued appreciation of Bitcoin.”

The outspoken short-selling firm, Citron Research, pointed fingers at MicroStrategy in late November, contending that the company's stock was "overheated." Andrew Left, a Citron analyst, took to social media to express concerns that MicroStrategy had effectively transformed into a Bitcoin investment fund, leading to their decision to short the stock

As the Bitcoin ETF (Exchange-Traded Fund) debuts, investors can gain direct exposure to Bitcoin funds without having to navigate through MicroStrategy stock as a substitute.

Citron’s report highlighted how Michael Saylor’s strategy involved the accelerated purchase of Bitcoin, even leveraging debt financingThe enthusiasm surrounding Bitcoin has propelled MicroStrategy's stock this yearStill, Citron warns that it parallels an infinite money glitch seen in video games—addictive with profit potential but unsustainable in the long run.

In response to his critics, Michael Saylor drew an analogy referencing Manhattan's real estate market, stating, “Each time real estate prices in Manhattan soar, developers issue more bonds to build even more properties, which is why the skyline in New York is so lofty.” He confidently claimed, “It has sustained for 350 years

I would call it economics.”

Interestingly, Saylor has suggested that with the arrival of a "red wave" sweeping the market, Bitcoin is well-positioned for growth, offering optimistic projections that other digital assets will rise in tandemHe noted Bitcoin still stands as the “safe trade” in the cryptocurrency landscape, and as the broader crypto market galvanizes into a cohesive “digital asset framework,” the entire sector is poised for an upward momentumFurthermore, he claimed a decrease in tax considerations surrounding unrealized capital gains and wealth taxes is imminent, along with dissipating regulatory hostility towards banks dealing with Bitcoin.

MicroStrategy's approach to Bitcoin investments has grown increasingly aggressive this year, purchasing more than 255,000 Bitcoins to date, approximately two-thirds of which were bought post-November 11. In a recent quarterly earnings call, the company unveiled a plan named “21/21,” which aims to raise $42 billion over the next three years—dividing the funding into $21 billion from equity and $21 billion from debt—specifically for investing in more Bitcoin