• By the Numbers: How Much Money Would MicroStrategy Have Lost Had It Invested in Gold Instead of Bitcoin?

  • Bitcoin was still recovering from one of its worst drops in the previous year a little more than a year ago. Simultaneously, the first cryptocurrency was about to enter a new era of adoption, which would propel it to new all-time highs in the coming months.

    From around $3,700 per BTC in 2020 to $10,000 in September 2020, to $51,670 at the time of writing. With a 478 percent profit since mid-last year, Bitcoin has proven why it is one of the best-performing assets of the decade.

    MicroStrategy, a software company, was buying its first coins to integrate BTC into its treasury around this time, from March to June 2020. Michael Saylor, the company’s CEO, announced the decision in a recent Twitter post.

    According to Saylor, the world economy is heading toward inflation as a result of the major central banks’ monetary policies. As a result, he decided to invest a large portion of the company’s value in a value store.

    When deciding between gold and Bitcoin, the executive chose the latter due to its characteristics. Saylor is a well-known Bitcoin bull, and its bet has so far paid off.

    According to the chart below, if MicroStrategy had invested in Gold instead of Bitcoin, the over $2 billion initial investment would have lost 80% of its value in one year. It would have lost 21% of its value in the last 30 days.

    According to BitcoinTreasuries.org, MicroStrategy owns over 100,000 BTC, or 0.5 percent of the total supply. As shown above, this investment has increased by 376.34 percent in one year.

    Because of its Bitcoin investment, MicroStrategy outperforms gold.

    Ecoinometrics data also suggests a link between the performance of MicroStrategy (MSRT) shares and the price of Bitcoin. Since the launch of its BTC treasury program, the company’s shares have increased by 428 percent.

    Bitcoin and MicroStrategy have outperformed the NASDAQ and the SP500, two of the most important stock indexes. Since the software company announced its BTC treasury program, the former has made a 68.3 percent profit, while the latter has made a 54.8 percent profit.

    Many companies, banks, and hedge funds are using MicroStrategy as a BTC price proxy in order to gain legal exposure to the cryptocurrency. Major investors in the company include BlackRock, Capital Group, Morgan Stanley, The Vanguard Group, and others.

    Many in the cryptocurrency community are skeptical of MicroStrategy and its CEO. Many people anticipate that the company will “dump” its BTC into the market when the opportunity arises. Saylor has responded to these claims by stating that he intends to hold Bitcoin “forever.”

    Without a doubt, the company launched a movement that propelled Bitcoin to new highs in terms of price and adoption. El Salvador will formally adopt the Bitcoin Standard tomorrow. The country has been officially added to the list of entities that hold BTC, following MicroStrategy, Tesla, Square, and others.

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