The Bitcoin effect: MicroStrategy stock surges following Bitcoin buys

One of the prominent institutional Bitcoin buyers, MicroStrategy, is already feeling the effects of adding Bitcoin to its portfolio. The firm which recently joined the Bitcoin billionaires club with the latest purchase of $650 million worth of Bitcoin has made $1 billion in unrealized profits. This is in addition to an increase in stock prices by over 200 percent within the last five months.

Led by CEO, Michael Saylor, the NASDAQ-traded business intelligence firm has purchased over $1.3 billion in Bitcoin. Beyond the company, Saylor is a Bitcoin mega bull who owns more than $17,500 Bitcoin.

One of the primary catalysts that pushed the firm to invest in Bitcoin is the rising inflation in the U.S. dollar. Saylor and a host of others are beginning to lose faith in fiat currencies as a store of value. For instance, in 2020 alone, the U.S. government has printed nearly 35 percent of all dollars ever created. Coupled with the economic uncertainty that is being fuelled by the global coronavirus pandemic, it becomes clearer that digital assets could be the future. At one point, Saylor tweeted:

It’s dangerous to think that gold and Bitcoin are similar & complementary investments. When the Bitcoin Dragon emerges from its lair, the first thing it will eat is the Kingdom of Gold.

Looking at the firm’s portfolio, MicroStrategy has purchased over $1 billion in Bitcoin at different market prices. Meanwhile, the year-to-date price chart of the firm reveals minimal price actions from January to November. In November, when MicroStrategy started purchasing Bitcoin, its stock began to rise eventually surging from around $120 to nearly $400.

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