Bitcoin Hype Boosts Microstrategy Stock: A Look at the Volatile Ups and Downs

The stock of MicroStrategy, a pioneer in transforming cloud software into a Bitcoin treasure trove, experienced a pleasing surge last month. The reason: Bitcoin reached peak values, and speculation that the Trump administration might implement crypto-friendly measures drove the price upward. First, the stock gained a full 59% over the month, as confirmed by data from S&P Global Market Intelligence. As a kind of leveraged Bitcoin ETF, MicroStrategy unsurprisingly experiences strong fluctuations in its value. The U.S. presidential election also gave cryptocurrencies and related stocks a considerable boost. President-elect Trump had sent signals indicating more favorable crypto conditions could be expected. It is rumored that the creation of a special crypto role in the White House is being considered, and discussions about a strategic Bitcoin reserve are on the agenda. Trump could also appoint a new SEC chairman to replace Gary Gensler, who is considered not very crypto-friendly. A setback came on November 21 when short-seller Andrew Left published his negative assessment on the X platform. He argued that the premium for owning MicroStrategy compared to Bitcoin was unreasonably high. Left, once an advocate of MicroStrategy, pointed out that acquiring Bitcoin had become easier thanks to ETFs and that the stock had increasingly decoupled from Bitcoin fundamentals. Following this publication, the price of MicroStrategy stock fell by 17% and ended the month slightly down. Outlook for MicroStrategy It is conceivable that MicroStrategy’s stock price will remain closely linked to that of Bitcoin. However, Andrew Left is not wrong; the company holds 402,100 Bitcoin valued at $38.7 billion, while its market capitalization is listed at $89.1 billion, more than twice as high. Part of this premium may be justified as MicroStrategy aggressively bets on Bitcoin and increasingly invests its balance sheet into the cryptocurrency. Whether the "Trump effect" on Bitcoin will persist in the long term remains uncertain, but continued support from the Trump administration could give both Bitcoin and MicroStrategy a renewed boost—even if investors should keep an eye on the high premium.