Record Bitcoin Price Drives MicroStrategy Stock to Dot-Com Era Highs; Here is What’s Happening

• MicroStrategy’s shares hit a 24-year high on Monday, surging 25.73% to close at $340 per share, marking the highest level since the dot-com bubble in March 2000.
• The rally was fueled by the rise in Bitcoin, with MicroStrategy holding approximately 252,220 bitcoins as of November 11, making it the largest corporate holder of the cryptocurrency.
• Bitcoin hit an all-time high of $89,560.95 on Monday, and MicroStrategy’s Bitcoin holdings were valued at around $22.64 billion at that price.

Michael Saylor‘s MicroStrategy shares surged to their highest level since the dot-com bubble as Bitcoin hit a new all-time high on Monday. The rally underscores MicroStrategy‘s position as a major corporate proxy for the cryptocurrency.

MicroStrategy Shares Surge to Dot-Com Highs

Shares of MicroStrategy Inc (NASDAQ: MSTR) rose as much as 25.73% on Monday to hit a record closing high of $340 per share. This marks the highest level for the shares since the dot-com bubble peak in March 2000.

The stock jump came as Bitcoin neared the $90,000 mark, hitting an all-time high of $89,560 on the same day. MicroStrategy holds over 120,000 Bitcoins in its corporate treasury, purchased at an average price of around $39,000. With the surge in Bitcoin, MicroStrategy’s holdings are now worth over $22 billion.

MicroStrategy Acts as Bitcoin Proxy

The business intelligence company has repositioned itself as a Bitcoin play, making large purchases of the cryptocurrency and touting its holdings. As a result, MicroStrategy’s stock tends to be volatile along with swings in the price of Bitcoin.

This allows the company to use its inflated share price to raise capital cheaply. It then uses the funds to acquire more Bitcoin for its balance sheet. Along with Marathon Digital Holdings, Galaxy Digital Holdings, Tesla and Coinbase, MicroStrategy is one of the largest public companies holding Bitcoin.

Dot-Com Bubble Fueled Tech Stock Surge

MicroStrategy’s gain brings its stock back to levels last seen during the dot-com bubble in 2000. The late 1990s saw a surge of investment in internet and technology companies, with the tech-heavy Nasdaq index rising over 400% in 5 years.

The exuberance peaked in March 2000, with the Nasdaq surging above 5,000. MicroStrategy hit $313 per share the same month. The dot-com bubble then burst in 2001-2002, causing a bear market.

Conclusion

MicroStrategy’s return to dot-com era valuations shows its transition to a Bitcoin proxy stock. With Bitcoin hitting new highs, investors are bidding up MicroStrategy’s shares based on its cryptocurrency holdings rather than its core business fundamentals. This gives the company access to cheap capital to expand its Bitcoin treasury further.