MicroStrategy broke the silence when it invested in Bitcoin. It changed how organizations viewed Bitcoin from an investment perspective. Of skeptics judging [critiquing] Michael Saylor and MicroStrategy’s investment decision for the same people dipping their toes in Bitcoin investments, things have changed for the better in the last quarter.
However, was MicroStrategy’s decision good?
Well, obviously, especially since its profits have more than doubled since its investment in Bitcoin. In fact, the same rose to 194% after Bitcoin rose to $ 23,700 less than 24-hours ago. While the profit is good, what’s better is that its stock price has now performed much better than Bitcoin has done since its first investment in August.
Competing with Bitcoin MSTR investment
Source: BTCUSD on TradingView
Bitcoin, since August, has increased by 106%, while MSTR has increased by 124%. However, Tesla has surpassed MSTR itself, recording 153% earnings.
In retrospect, maybe invest in TSLA [although weird for a public company to invest in another public company] it would have given MSTR more profit than Bitcoin has so far since August. However, one should understand that while TSLA would undoubtedly have returned more product than Bitcoin, these gains would be short-term.
Unlike Bitcoin, Tesla has more variables or wild cards that could wildly affect its stock price. While this risk of the unknown may either give MST high returns in the future or perhaps lower, Bitcoin is programmed to continue its journey to scarcity, meaning fewer variables .
One thing to note here is that Bitcoin or Tesla would face common uncertainties like the pandemic and its effects on the global financial market. Well then, what about other safe assets like gold or silver?
Obviously, the returns on these or other safe haven assets or precious metals have been lower than Bitcoin or TSLA.
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While there may be better assets that may yield better returns than Bitcoin in the short run, they are not viable for the long-term investment that MSTR is looking for. So far, in uncertain times like these, the cryptocurrency ecosystem seems to be the only one with the answer.
Moreover, since its Bitcoin investment, the stock has soared, too, which is a rare fact considering MicroStrategy’s competitors – Looker & IBM – both of which have nearly zero earnings since August. Conversely, another competitor, Domo, has seen a 100% surge during the same period and is an ergo exception.