Under Michael Saylor's leadership, MicroStrategy (NASDAQ: MSTR) has become the publicly-traded company that has most closely tied its prospects to leading cryptocurrency Bitcoin (BTC).
MicroStrategy buys more bitcoin, and stock gets a lift after analyst boosts price target by 44%.
The company used proceeds from a recent sale of stock and converible bonds to buy more of the cryptocurrency.
Shares in MicroStrategy (MSTR), the largest corporate holder of Bitcoin (BTCUSD), are jumping Monday in premarket trading, as the cryptocurrency trades near the $100,000 mark for the first time.
The T-Rex 2X Long MSTR Daily Target ETF has surged 800% since its launch, thanks to MicroStrategy's stock performance and a favorable market environment. MSTU's success is driven by fortunate timing, the emergence of single stock ETFs, and a significant Bitcoin rally influenced by a crypto-friendly Trump administration. Leveraged ETFs like MSTU can outperform their underlying assets significantly in low-volatility environments, as demonstrated by MSTU's more than 2x performance of MicroStrategy.
Shares of MicroStrategy (MSTR 6.19%) jumped 24.7% higher this week, according to data from S&P Global Market Intelligence. The Bitcoin investment company was helped by the cryptocurrency's price appreciation this week along with a convertible debt offering at a 0% interest rate.
The company has been raising money to buy the cryptocurrency.
After a huge post-election rally, Bitcoin (BTC -0.28%) just hit another all-time high, and is on the cusp of breaking through the $100,000 mark for the first time ever. For the year, it is now up 110%.
Compared to crypto, stock multiples don't look outrageous. But in the past, rising bond yields and rich stock multiples have led to irrational exuberance and problems.
The $1.2 billion ETF offers less upside than stock in the big Bitcoin holder. However, income has been ample due to volatility in MicroStrategy shares.
Bitcoin tapped the $100,000 milestone before fading intraday. Alex Coffey and Jenny Horne turn to Bitcoin futures and find volatility rides high with the cryptocurrency's outlook.
MicroStrategy's stock chart produces a textbook “key reversal” pattern on record volume — a worrisome sign for bulls.