Currently trading near an all-time-high, Bitcoin (CRYPTO: BTC) continues to lead the crypto market higher. As a result, analysts and investors continue to ratchet up their price estimates for just how much higher Bitcoin might go. One of the most aggressive price forecasts comes from Cathie Wood’s Ark Invest, which has detailed a scenario in which Bitcoin might surge past the $2 million mark by the year 2030.
If that turns out to be true, people will be kicking themselves for not getting in on stocks whose success is massively tied to the price of Bitcoin. The two that I’m watching right now are MicroStrategy (NASDAQ: MSTR) and Coinbase Global (NASDAQ: COIN).
MicroStrategy
For the past year, investors have viewed MicroStrategy as a proxy stock for investing in Bitcoin. That’s because MicroStrategy currently has the largest Bitcoin holdings of any publicly traded company in the entire world. Right now, the company has 193,000 Bitcoins on its balance sheet, worth an estimated $13 billion at today’s market prices. By way of comparison, the total stock market capitalization of MicroStrategy is $21 billion.
And, if anything, this extremely leveraged Bitcoin position is only going to grow over the next few years as the company just announced a massive new $700 million convertible note offering. The purpose of the new offering is mind-numbingly simple: to buy more Bitcoin. So get ready to hear more from MicroStrategy about its all-in Bitcoin strategy. Already, its aggressive Bitcoin strategy has pushed up the company’s stock price to a 24-year high.
The only caveat here, of course, is that the company could reach a point where it simply has too much Bitcoin on its balance sheet. If the price of Bitcoin were to decline significantly for a long period of time, then the valuation of MicroStrategy might nosedive.
For that reason, I’d like to see MicroStrategy continue to build out its core software business over the coming years. The company has hinted that new AI-related software offerings might be on the way. This would help to provide at least some diversification and…
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