Today witnessed substantial increases in MicroStrategy, Mara Holdings, and Riot Platforms' stock prices.
Today witnessed substantial increases in MicroStrategy, Mara Holdings, and Riot Platforms' stock prices.
MicroStrategy's shares (MSTR 13.22%) surged on Monday, soaring roughly 5% by 2 p.m. ET. The reasons for this upward trend are numerous. Over the weekend, after market hours, Nasdaq announced that the company would be included in the Nasdaq-100 index, a list comprising around 100 non-financial corporations. This is a significant milestone for the company considering its market capitalization was barely over $1 billion only five years ago, which was far below the Nasdaq-100's threshold.
The company's substantial gains can be attributed to its bold investments in the world's primary cryptocurrency: Bitcoin. According to a financial statement dated December 16, MicroStrategy purchased an additional 15,350 Bitcoins within the past week, bringing its total holdings to approximately 439,000 Bitcoins.
This move is noteworthy given that Bitcoin's value has soared roughly 1,500% over the past five years. In fact, it reached a new all-time high today, surpassing $107,000 per Bitcoin. As the price of Bitcoin increases, so does the value of MicroStrategy's holdings, thereby positioning the company among the world's most valuable entities and securing its place in the Nasdaq-100.
MicroStrategy's success has also inspired other companies to adopt a similar strategy. Mara Holdings (MARA 14.12%) and Riot Platforms (RIOT 17.97%) are two of the largest Bitcoin mining companies globally. Both companies are now actively purchasing Bitcoin, mimicking MicroStrategy's approach. Consequently, as Bitcoin's price rose, so did Mara and Riot's shares by about 10% by 2 p.m. ET.
Presently, the tide just keeps rising
As of December 9, Mara possessed 40,435 Bitcoins. A substantial portion of these, over 20,000, were mined through the company's regular operations. However, in recent months, Mara has been purchasing Bitcoin on the open market as well.
The case is similar for Riot. According to a press release published today, the company managed to secure funds through a debt offering, raising $579 million after accounting for expenses. Riot plans to invest all of this capital into purchasing Bitcoin, enabling it to acquire nearly 5,500 Bitcoins at the current price. This figure will be added to the 16,728 Bitcoins it already owned as of December 13.
The relationships between Bitcoin's price and the stock prices of MicroStrategy, Mara, and Riot are starting to form a sort of symbiotic relationship. When Bitcoin's value rises, so do the shares of these three companies due to their significant Bitcoin holdings. Conversely, as the value of these companies increases, they are able to secure more funds to purchase more Bitcoin, thereby driving the price up further.
Will Bitcoin's triumphant march continue?
As long as Bitcoin continues to rise, the stocks of MicroStrategy, Mara, and Riot should also maintain their upward trajectory. Historically, there is a strong likelihood that Bitcoin will experience a positive trend in 2025.
It's important to remember that Bitcoin is not devoid of risk. Previously, events such as failed cryptocurrency exchanges, excessive leverage, and regulatory concerns have caused Bitcoin's value to drop. While the regulatory situation seems to be improving, these risks remain unresolved issues.
However, Bitcoin has displayed exceptional growth the year before its halving event, during the year of the halving event, and in the subsequent year. Without delving into complex explanations, the halving event disrupts the market's supply and demand equilibrium, typically resulting in price increases.
This year marked a halving event for Bitcoin. Consistently, the price surged in 2023 and 2024. If history repeats itself once again, Bitcoin's price could continue to increase in 2025.
To reiterate, maintaining a healthy level of skepticism is essential in investing. Nevertheless, if Bitcoin experiences a bull run in 2025, it should bode well for MicroStrategy, Mara, and Riot, generally speaking.
- Due to the surge in Bitcoin's value, MicroStrategy's substantial Bitcoin investments have significantly boosted its market capitalization, potentially justifying its inclusion in the Nasdaq-100 and attracting more investors interested in finance and money engagement in the cryptocurrency market.
- As Bitcoin mining companies like Mara and Riot continue to purchase Bitcoin with their capital gains, the symbiotic relationship between Bitcoin's price and the stocks of these companies is likely to persist, potentially leading to further financial investments in the field of cryptocurrency and digital finance.