As of today, MicroStrategy (MSTR) has exceeded a $100 billion market capitalization to become the 93rd largest publicly-listed corporation in the U.S.
At the present moment, MSTR has achieved a higher trading volume than stock juggernauts Tesla and Nvidia today, resulting in traditional stock traders, particularly the Wall Street Bets cohort, losing their composure.
Incredible $MSTR is the most traded stock in America today.. surpassing $TSLA and $NVDA is astonishing. It’s been years since a stock has outperformed either of those two (it may have actually been $GME that last did it). It’s also about twice $SPY! Unprecedented times.. pic.twitter.com/bUr8nycMX3
— Eric Balchunas (@EricBalchunas) November 20, 2024
This is truly astounding considering MicroStrategy was merely valued at $1 billion when it initially acquired bitcoin for its treasury roughly four and a half years ago.
The critical inquiry I’m pondering is, how and when does this conclude? If MSTR continues to surge until the pinnacle of this bull market, it’s unpredictable how high MSTR might soar.
However, how drastically will it plummet in a bear market, given that it is essentially a leveraged position on bitcoin? Shall I even propose that this instance might be unique, and that the decline during the next bitcoin bear market won’t be as severe as the historical corrections of 70% or more that we’re accustomed to witnessing?
Even with the presence of spot bitcoin ETFs, and the perspective that the U.S. might spearhead the movement of nation-states accumulating significant volumes of bitcoin, I remain skeptical that we don’t eventually encounter a substantial downturn in bitcoin’s valuation. I am mentally gearing up for a typical bitcoin bear market to begin once this bull market concludes sometime within the next year.
Returning to MSTR — Michael Saylor has effectively demonstrated that the Bitcoin for Corporations model operates remarkably well. Public enterprises have been emerging this past week, announcing that they have acquired bitcoin for their balance sheets or intend to do so, and it seems that this pattern will persist as the CEO of Rumble inquired of his X audience if Bitcoin should be added to their balance sheet (approximately 94% of his 42,522 voters answered “yes”).
Let’s frame this in a polling format…
Should Rumble incorporate Bitcoin into its balance sheet?
— Chris Pavlovski (@chrispavlovski) November 19, 2024
Michael Saylor even extended his assistance in elucidating how and why Rumble ought to implement a corporate BTC strategy.
Institutional bitcoin acceptance has commenced and is set to expand for the foreseeable future. As companies discern the rationale for adopting bitcoin as a strategic reserve asset, the quantity of publicly-traded firms embracing this strategy is poised to escalate.
Firms that incorporate bitcoin into their balance sheets will outperform most others — even leading tech giants — in terms of trading activity, as MicroStrategy has done, until all companies integrate bitcoin into their balance sheets. I find myself imagining the perspective of a trader, knowledgeable about Bitcoin, and ask myself, “Why on earth would I purchase any company’s stock that lacks bitcoin on their balance sheet?” I wouldn’t — it would be exceedingly dull.
Including BTC in the balance sheet aids in generating volatility, thereby creating opportunities for stock traders, which is beneficial for the traders, stock prices, and the overall company. For publicly-traded entities, adopting bitcoin as a treasury reserve asset is an obvious choice.
This piece is a Take. The views expressed are solely those of the author and do not necessarily align with those of BTC Inc or Bitcoin Magazine.
