MicroStrategy’s stock price increased by 3% on Tuesday after Bitcoin’s price rebounded above the $26,000 mark following several days of underperformance.
Microstrategy is the largest publicly traded company holding the flagship cryptocurrency, with 158,800 BTC valued at over $4 billion listed as part of its assets.
MicroStrategy’s shares climbed 3% in premarket trading on Tuesday, following Bitcoin’s 4% revival, which broke the $26,000 threshold for the first time since last Friday.
At the time of writing, MicroStrategy’s stock was trading for approximately $353 per share before the market’s opening, while BTC’s price was $26,144.
Several altcoins were boosted by Bitcoin’s rise, with Ethereum, Binance Coin, XRP, Dogecoin, and Cardano gaining between 1.5% and 2.5%.
Given that Michael Saylor’s company is the largest corporate holder of cryptocurrency, the correlation between MicroStrategy’s stock price and Bitcoin is not surprising.
The corporation is viewed as a Bitcoin proxy, functioning almost like an exchange-traded fund (ETF).
As of August 1, 2023, MicroStrategy had 158,800 bitcoins. Its total purchase price for the most significant crypto asset is more than $4.5 billion, with an average price of about $29,672 per coin.
MicroStrategy has become synonymous with Bitcoin over the years, which appears to be the company’s intention, and it presently controls nearly 0.7% of the total Bitcoin supply.
The future supply of bitcoin is limited to 21 million coins.The business and stock performance of MicroStrategy have unquestionably benefited from the company’s aggressive Bitcoin strategy.
This week, the company and other large corporate Bitcoin holders received a stimulus.
Notably, crypto companies and businesses with substantial Bitcoin holdings have embraced the long-awaited accounting rules to determine the value of their crypto holdings, which were approved by a unanimous vote of US accounting policymakers.
Under the new regulations, companies that hold or invest in cryptocurrencies must report their holdings at fair value, enabling them to account for the most current value of an asset, including price recoveries.
Although the new rules will likely add volatility to the earnings of companies heavily exposed to cryptocurrencies, the ability to record price recoveries is anticipated to improve current accounting practices significantly, according to company statements.