Indeed. The world of modern news is not for the faint-hearted!!! 🤔
The price of Bitcoin has risen significantly over the past 16 years, outpacing the stock market and becoming the fifth largest asset in the world after gold, Microsoft, NVIDIA, and Apple, with a valuation of $2.1 trillion.
Bitcoin (BTC) has grown more than 1000% over the past five years, while the Dow Jones has risen by 70%, and the tech index Nasdaq 100 has risen by 122% over the same period.
On the other hand, Strategy's shares have outperformed all these assets after transforming its business model from a purely software company to a Bitcoin holding company. Its shares soared nearly 3000%, increasing its market capitalization from $1 billion in 2020 to $101 billion today.
Investors interested in Bitcoin today have at least three main options. First, they can take the simplest route: buy Bitcoin and store it on exchanges or in self-custody wallets.
Second, they can invest in spot Bitcoin ETFs, which now hold over $131 billion in assets. These ETFs offer direct access to Bitcoin but charge a small management fee.
Third, there is Strategy, which has become the largest corporate holder of Bitcoin with over 580,250 BTC on its balance sheet. Investors are betting on its model, as its current market capitalization of $101 billion is 1.58x the value of its Bitcoin assets.
Strategy's approach has proven effective, as its net asset value (NAV) premium enhances Bitcoin's price growth. A higher stock price, in turn, makes it easier for the company to raise funds and accumulate more Bitcoins.
At the same time, the rising Bitcoin price helps offset stock dilution through faster growth of the firm's assets in BTC, leading to a higher Bitcoin value per share for investors.
However, concerns about further dilution are raising worries. The company's plan to raise $84 billion through stock sales has put pressure on its shares. While Bitcoin is trading near its all-time high, Strategy's shares have fallen more than 12% from their 2025 peak.
Analysts remain optimistic about Bitcoin's long-term prospects. BlackRock predicts that BTC could reach $700,000, while Ark Invest sets a more aggressive target of $2.4 million. If any of these forecasts turn out to be accurate, Bitcoin and Strategy shares are likely to provide strong long-term gains.
With BlackRock's target price of $700,000, Bitcoin will grow approximately by 536% from current levels, giving it a market capitalization of at least $13.9 trillion.
Assuming that Strategy owns 576,230 BTC by that time, its Bitcoin assets will be worth $403.36 billion. Applying a historical NAV premium of 1.58x suggests that Strategy's market capitalization could exceed $637 billion.
If the Bitcoin rally continues and the NAV premium remains, Strategy's shares will outperform Bitcoin in relative returns.
#Bitcoin2025
Wow, how about that.. ?! 😳
