- Warren Buffett and Berkshire Hathaway have lost out on MicroStrategy’s 1,000% stock value growth since the company purchased its first Bitcoin.
On August 10, 2020, MicroStrategy became the first publicly listed business to use Bitcoin as its principal treasury reserve asset when it bought its first hoard of the cryptocurrency. After four years, the audacious decision has become the company’s defining approach, outperforming even Warren Buffett’s Berkshire Hathaway in terms of returns.
MicroStrategy makes $5.38 billion from Bitcoin.
MicroStrategy purchased 226,500 BTC at an average cost of about $37,000, bringing its reserves to $13.771 billion as of August 10, 2024. MicroStrategy is currently resting on unrealized earnings of over $5.39 billion, with Bitcoin trading at roughly $60,500.
Michael Saylor’s company has held onto its Bitcoin holdings despite the significant increases, opting not to sell any of its acquired assets. Its most recent acquisition on August 1 further demonstrates its stated goal to keep acquiring Bitcoin.
Legendary Warren Buffett is being beaten by Michael Saylor
Since August 2020, MicroStrategy’s MSTR stock has increased by over 1,000%, demonstrating a bullish response to the company’s Bitcoin purchases. That is, by contrast, 1.5 times greater than the returns on Bitcoin and 16.25 times greater than the returns for the same time period of the S&P 500 (SPX) index.
It’s interesting to note that since MicroStrategy made its first Bitcoin purchase, BRK.A, Warren Buffett’s Berkshire Hathaway Class A stock, has substantially underperformed compared to MSTR. Throughout this time, BRK.A has only increased by 104.75%, and Buffett’s ongoing disapproval of Bitcoin has prevented Berkshire from investigating cryptocurrency assets.
In 2018, Buffett described Bitcoin as “rat poison squared.” In a comment made in 2021, his close buddy Charlie Munger—who subsequently passed away—went a step farther and prophesied that the price of Bitcoin will plummet to zero, branding it a repulsive commodity.
Even so, in recent years, MSTR and Bitcoin have outperformed Buffett’s top stocks, which include Apple, American Express, and Bank of America.
But other traders have stated that they want to short the MSTR stock, arguing that it is trading at an unreasonable premium to Bitcoin, according to investment company Kerrisdale Capital.
Chief investment officer at Kerrisdale Capital Sahm Adrangi said that the software industry is valued at a billion, possibly a billion [point] five, or somewhere in the middle. At that point, it’s not worth very much.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
