Will MicroStrategy exceed bitcoin’s market cap in 2025?
MicroStrategy (NASDAQ:MSTR) started 2023 with a market capitalization of just $1.8 billion. Today, this figure sits at $111 billion. Its 2023 market cap was also less than its then-$2.1 billion worth of bitcoin holdings but that negative multiple has now flipped decidedly positive.
As of publication time, MicroStrategy’s market cap boasts a 3.55 multiple on its $31.1 billion worth of bitcoin holdings. That makes it 5.9% the market capitalization of bitcoin.
This makes MicroStrategy nearly 6% the size of bitcoin itself. At the start of 2023, it was a negligible 0.5%. Its growth is as noteworthy as it is curious.
Of course, MicroStrategy owns bitcoin, so its assets are themselves part of the market cap that it is displacing. Nevertheless, the company is growing at a multiple beyond a simple capital match: 3.55X and growing.
Because the company is able to access bond markets at favorable interest rates — upsizing rounds into the tens of billions and dropping interest payments toward 0% — investors bid far more for the holding company’s equity than its actual holdings.
Already, MicroStrategy investors believe that the company will be able to continue accreting bitcoin on a per-share basis, even after accounting for dilution. Some people think this premium will persist long enough for the company to expand its asset holdings beyond bitcoin and even exceed the currency’s market cap.
As wild and irrational as it sounds, this proposition has its believers. Some MicroStrategy investors believe it could become larger than bitcoin.
Read more: Michael Saylor has lost voting control of MicroStrategy
Quarter after quarter, the company has been able to add leverage or capture some of its asset multiple in order to positively accrete a dilution-adjusted “yield” of bitcoin to each MSTR share. As recently as yesterday, Saylor boasted that this yield totaled 41.8% since January 1, 2024.
As Protos flagged on Monday, this figure is accurate as of currently outstanding shares yet excludes the future dilution of convertible instruments.
Needless to say, belief that a bitcoin acquisition company will become larger than the asset it’s acquiring is a wild theory that spreads in niche social media groups like Irresponsibly Long MSTR.
Most rational investors dismiss the proposition out of hand, and the list of obvious risks of betting on that outcome is too long to enumerate.
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