Cryptocurrency

MicroStrategy’s Market Cap Could Soon Surpass Those of Starbucks and Nike If Bitcoin Reaches a Price of $138,000

TokenTrail December 28, 2024

As of now, MicroStrategy’s (MSTR) stock prices have soared by an astonishing 546% for the year, with its market cap currently standing at a staggering $99.4 billion. The primary reason behind this significant year-to-date yield is the organization’s substantial Bitcoin (BTC) reserve. In 2024, MicroStrategy added a whopping 249,850 BTC to its treasury, bringing its total tally to an impressive 439,000 BTC.

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The Largest Corporate Holder of Bitcoin

With its market cap on the cusp of breaking the $100 billion threshold, MicroStrategy will surpass major American companies if Bitcoin hits higher price targets. According to recent estimates, MicroStrategy’s market cap will eclipse that of Starbucks and Nike if BTC reaches a price target of $138,000.

A Direct Outlook of MSTR’s Market Cap Potential

MicroStrategy holds the largest corporate amount of Bitcoin, surpassing Marathon Digital’s tally of 40,435 BTC by an astonishing 985%. As such, monitoring BTC’s price provides a direct insight into MicroStrategy’s market cap potential. Based on its net asset value (NAV) worksheet, MicroStrategy’s fully diluted market cap is estimated to be $114 billion, with the derived MSTR NAV standing at around $40 billion.

MicroStrategy’s NAV Worksheet

The Impact of a $1,000 BTC Price Movement

Every time the crypto asset moves by $1,000 in either direction, MicroStrategy’s market cap gains approximately $440 million. This means that a mere 11% Bitcoin rally to $118,810 will allow MicroStrategy’s market cap to surpass Starbucks’, which currently stands at $105.5 billion. A 32% uptick to $140,000 per BTC would take MSTR’s market cap ahead of Nike, assuming the company does not add to its current BTC holdings.

MicroStrategy’s Bitcoin Playbook

MicroStrategy’s method for buying and holding Bitcoin is built on a strategy that involves purchasing BTC at higher levels, where the company issues debt and utilizes the proceeds to buy Bitcoin. This, in turn, drives up the price of BTC. However, this approach has its detractors, with Chainlink advocate Zach Rynes stating that he was "deeply uncomfortable" with MicroStrategy’s "debt-based acquisition."

A Safe Haven for Bitcoin Long-Term Holders

However, Ki-Young Ju, CEO of CryptoQuant, disagrees with the notion that MicroStrategy’s method will backfire. In an X post, Ju stated: "MicroStrategy only goes bankrupt if an asteroid hits Earth. For 15 years, #Bitcoin has never dropped below the cost basis of long-term whales, which currently stands at $30K."

A Low Concern for Debt

Ju also added that MicroStrategy’s debt is not a pressing concern since it is currently standing at $7 billion, compared to its BTC holdings, which are worth around $47 billion. This suggests that even if the price of Bitcoin were to drop significantly, MicroStrategy would still have sufficient assets to cover its liabilities.

Investment Advice

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. It is essential to consider multiple factors before investing in any asset class, including the potential risks and rewards.