MicroStrategy (MSTR) continues to bet on Bitcoin (BTC) after the holding company completed an offering for $3 billion, which generated $2.97 billion in net proceeds. The self-described “first and largest Bitcoin Treasury Company” intends to use this money to purchase more BTC and for general corporate purposes.
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While MicroStrategy hasn’t revealed when it will use these funds to buy more Bitcoin, it will likely do so soon. The company has recently been on a BTC buying spree, pushing its holdings to 331,200 tokens.
Bitcoin has also been on the rise lately as investors hope for a more crypto-friendly administration when President-elect Donald Trump takes office next year. This has many crypto traders expecting the price of BTC to surpass $100,000 for the first time. Hence, it’s reasonable to expect MicroStrategy to buy more of the digital asset before this happens.
Will MSTR’s Bitcoin Bet Payoff?
MicroStrategy is taking a unique stance with its Bitcoin investments right now. The company is essentially acting as a surrogate for traditional traders who don’t want to hold the crypto directly. In that sense, it’s not much different from an exchange-traded fund (ETF).
Examining the performance of MSTR stock, we see that this strategy has been fruitful so far. The stock is up 548.92% year-to-date, with a gain of 727.33% over the past 12 months. The stock has slipped slightly today as BTC prices declined 2.03% as of this writing.
Is MSTR Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for MicroStrategy is Strong Buy based on eight Buy ratings over the last three months. That comes with an average price target of $357.38, a high of $570, and a low of $270. This represents a potential downside of 14.5% for MSTR shares.
