MicroStrategy's stock (MSTR) surged nearly 8% during Friday's pre-market trading, extending its meteoric rally as the company doubles down on its bitcoin bet amid a broader crypto frenzy. The frenzy has been fueled by optimism over favorable regulations under the incoming Donald Trump administration.
Bitcoin neared the historic $100,000 milestone on Friday, topping $99,500 for the first time as the world's largest cryptocurrency has now rallied over 40% since Trump's election victory on November 5. The crypto industry is positioning itself for a potential regulatory windfall under the new administration.
MicroStrategy, led by bitcoin evangelist Michael Saylor, announced plans to raise $2.6 billion through convertible debt to acquire additional bitcoins. The company currently holds over 330,000 bitcoins worth over $32 billion, acquired at an average price of around $49,874 per coin.
The frenzy surrounding bitcoin has also driven massive inflows into bitcoin ETFs, with funds like the iShares Bitcoin Trust (IBIT) attracting over $600 million in a single day this week. The launch of options trading on major bitcoin ETFs has further fueled institutional interest and demand for crypto exposure.
While some analysts warn that MicroStrategy's stock is becoming overheated and disconnected from fundamentals, the self-reinforcing feedback loop of bitcoin price gains and MicroStrategy's debt-fueled buying spree shows no signs of slowing. However, risks of a potential correction loom as short sellers like Citron Research take bearish positions against the stock.
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