Mackenzie Tatananni

MicroStrategy stock rose Monday after the software company revealed it had snapped up even more Bitcoin.

It's hardly news for a company whose name practically is synonymous with that of the cryptocurrency. But that's just about where the relationship ends. If MicroStrategy were to stop buying Bitcoin today, this would have little to no impact on the price, according to analysts at TD Cowen.

MicroStrategy filed a Form 8-K with the U.S. Securities and Exchange Commission showing that it snapped up 6,556 digital tokens for $555.8 million in cash, or roughly $84,785 per Bitcoin, between April 14 and April 20.

Shares of the world's largest corporate holder of Bitcoin, which does business as Strategy, gained 1.4% to $321.55. The benchmark S&P 500 was down 2.7%.

The latest purchase brings the company's total holdings to 538,200 Bitcoins. Based on the current price of the digital currency, MicroStrategy's holdings are valued at around $47 billion.

Its Bitcoin yield, or the change in the ratio of its holdings to total assumed shares outstanding from period to period, was 12.1% for the period from Jan. 1 through April 20.

Also lifting shares on Monday was the rising price of Bitcoin, which was up 4.1% over the past 24 hours to $88,079, according to CoinDesk data.

Founded as an enterprise software company in 1989, MicroStrategy increasingly has been viewed as a leveraged play on the cryptocurrency.

The company adopted Bitcoin as its primary treasury reserve asset in August 2020 and has steadily accumulated more cryptocurrency since then, using proceeds from its at-the-market programs to fund the purchases.

Some analysts have argued that buying large volumes of Bitcoin so frequently could influence its price, but TD Cowen analysts see things a different way.

The firm examined weekly trading volume and price action data over the past six months and found that MicroStrategy's purchases represented only a fraction of total Bitcoin trading volume, with a median average weekly result of 3.3%.

"Statistically speaking, there is little to no correlation between Strategy's weekly Bitcoin purchase volume and BTC price at the end of said week, with a correlation coefficient of just 25%," the analysts wrote.

A correlation coefficient closer to +1 or -1 indicates a positive or negative association, respectively. The firm's findings suggest that Bitcoin's price action largely is independent of MicroStrategy's purchases.

While Bitcoin is viewed as a hedge against inflation -- a belief shared by MicroStrategy boss Michael Saylor -- it actually is more volatile during periods of market uncertainty.

The cryptocurrency also trades largely on sentiment. Investors were holding out hope that President Donald Trump would establish a strategic Bitcoin reserve. He ultimately signed an executive order in March that directed the creation of a Bitcoin reserve and "digital asset stockpile, " but the price of Bitcoin fell shortly after the announcement as it didn't include a government plan to buy any of the crypto.

Bitcoin remains down 5.8% so far into 2025, and down 19% from its all-time high of $109,000, as tariff uncertainty and fears of a looming recession continue to weigh on the price.

MicroStrategy, by comparison, has gained 10% over the same period. While it trades at a higher premium to its Bitcoin holdings than the iShares Bitcoin Trust ETF, the stock also has outperformed the exchange-traded fund, which was down 9.6% as of April 17.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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April 21, 2025 11:46 ET (15:46 GMT)

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