MicroStrategy: Buy Before The Upcoming Crypto Bull Run

Summary

MicroStrategy (MSTR) is a top Bitcoin play on NASDAQ, poised for explosive growth in the upcoming
Q4 crypto bull run.

MSTR has outperformed nearly every S&P 500 stock since adopting a Bitcoin strategy in August 2020
under Michael Saylor.

Saylor's strategy of borrowing capital to purchase Bitcoin has significantly increased shareholder valu
e.

More CEOs will likely adopt Bitcoin strategies to help their companies outperform peers, even with s
uboptimal day-to-day operations.

Joe Raedle

MicroStrategy (MSTR) is the premier Bitcoin play on the NASDAQ that is positioned for explosive
growth during the upcoming Q4 crypto bull run.

Too many investors are sleeping on the fact that MSTR has outperformed nearly every single S&P 500
stock since Michael Saylor adopted a corporate Bitcoin strategy in August 2020.
MSTR performance vs Other Assets (microstrategy.com)

Think about this for a second: Saylor returned more value to shareholders by borrowing capital and
purchasing 1 single asset: Bitcoin.

MicroStrategy has made almost $5 billion in profit since buying Bitcoin in 2020.

It's only a matter of time until more CEOs catch on and understand that Bitcoin can help any
company outperform its peers over the long run.

MicroStrategy has performed so well over the last 4 years that the company performed a 10 to 1
stock split thanks to all of the bullish demand.

MicroStrategy Overview

MicroStrategy is a business software and Bitcoin development company founded in 1989 by

It's funny because MicroStrategy is headquarted in Vienna, VA just outside of Washington, DC where
I grew up.

My father talked about Michael Saylor during the Dot com boom and said he was once the richest
man in Washington, DC at one point!

Of course, all this took place before MicroStrategy adopted a corporate Bitcoin strategy in August
2020.

The company generates revenue through product licenses, subscriptions, support, and other
services. However, most MSTR investors are interested in the company's
Bitcoin acculumation strategy.

MicroStrategy accumulates Bitcoin in 3 ways:

 Investing free cash flows in Bitcoin

 Borrowing money to buy Bitcoin

MicroStrategy borrowed $3.8 billion in senior secured and convertible debt to acquire more Bitcoin.
In June 2024, the company issued an $800 million 2032 convertible note at an adjusted conversion
price of $2,043 per share.

Also, MicroStrategy raised $2 billion using an ATM market offering to buy more Bitcoin.

MicroStrategy invented the term "BTC Yield" to show the % change period to period of the
ratio betweeen Bitcoin holdings and assumed diluted shares. Right now, the BTC yield is 12.2% but
the company plans to bring this down to 4 to 8% over the next 3 years.

Saylor and co are some of the biggest Bitcoin bulls on the planet and the company alone owns more
than 1% of Bitcoin's total supply.

With so much BTC on hand, I consider MSTR the best leveraged Bitcoin play on the market right now.
It's been humbling to witness how consistent MicroStrategy has been with their Bitcoin purchases.

MSTR Bitcoin Acculumation Over Time (microstrategy.com)

MSTR Q2 2024 Results

In Q2 2024, MicroStrategy earned $111.4 million in revenue (down 7.4% YOY). Net losses were $200
million in Q2 2023 but most of that was due to digital impairment losses. Bitcoin was down 12.9% in
Q2 2024 so the company loss $180.1 million because of this.

The good news is that digital impairment losses are unrealized losses since MicroStrategy believes in
a "Never Sell" Bitcoin adoption strategy.

MicroStrategy purchasd 12,222 Bitcoin in Q2 2024 for $805.2 million or $65,882 per coin. As of July
2024, the company holds 226,500 Bitcoin at a total cost of $8.3 billion or $36,821 per coin.
Q2 2024 MSTR Bitcoin Highlights (microstrategy.com)

To break things down on a daily basis, MicroStrategy accumulated 135 Bitcoin on average per day in
Q2 2024. That's literally 30% of the daily issued being acquired by 1 company.

Are you starting to understand why so many investors are bullish on MSTR? If Bitcoin becomes the
global treasury reserve asset and hits Hal Finney's $10 million BTC price prediction then MSTR
shareholders will be very happy!

Understanding Crypto Bull Markets

The reason I'm so bullish on MicroStrategy right now is because of the upcoming Q4 2024 crypto bull
run cycle.

My prediction is based on the historical 4 year Bitcoin cycle that usually starts with the Bitcoin
halving event.

The Bitcoin halving event is when the daily issuance of Bitcoin gets cut in half every 4
years. Satoshi Nakamoto (the anonymous founder of Bitcoin) wanted to build scarcity and value into
the Bitcoin network by reducing the daily release of BTC on a predictable schedule.

This is the exact opposite of the legacy financial system that prints too much money causing inflation.

Scarcity increases value whether you are talking about Gold or rare baseball cards.

Saylor understands this well, which is why MicroStrategy's massive 226,500 Bitcoin stash should
garner more attention before the next crypto bull run takes into effect.

Risk Factors

 Lower Bitcoin prices: MicroStrategy is extremely linked to Bitcoin prices because the
company holds so much BTC on its balance sheet. Typically, MSTR shares will go up quicker
than Bitcoin on green days and crash harder than Bitcoin on red days. That's because MSTR is
a leveraged Bitcoin play to most retail and institutional investors. I don't
expect Bitcointo crash in price but an unexpected Bitcoin crash could really tank MSTR share
prices.
  Crypto Hackers: MicroStrategy uses Coinbase as their Bitcoin custody partner but I always
wonder what would happen if Coinbase got hacked and MicroStrategy lost their Bitcoin. This
would crush the company's market cap at record pace. The good news is that Coinbase keeps
most of its Bitcoin in cold storage but the whole FTX situation put everyone on
edge. Coinbase is publicly traded on the NASDAQ, which helps with credibility and trust.
However, I always fear that Coinbase could ruin MicroStrategy's BTC stash if something were
to happen inside the company.

 Death of Michael Saylor: Saylor has millions of followers across social media who own MSTR
stock because of him. I don't want to think about it but an untimely death for
Michael Saylor would really tank MSTR stock prices. A lot of retail investors own MSTR
because of him even though they don't understand how the company works.

 Delayed Interest Rate Cuts: Fed Chairman Jerome Powell needs to cut interest rates soon
before the U.S. economy starts tanking. So many people are broke or strugging to pay bills,
which means the Fed must step in and cut rates to boost economic activity. Interest rate cuts
are generally bullish for stocks and crypto because high yield investors look for returns
elsewhere once the risk-free 5% yield on cash dries up. However, if Jerome Powell doesn't
cut rates then MSTR shares cannot go as high without attracting fresh capital from the
sidelines.

My Gameplan for MSTR

I plan to load up on MSTR shares during September while prices remain depressed. September is
historically the worst month for Bitcoin while October is the best month historically for BTC.

Holding MSTR shares can provide 2 to 3x returns over the next 3 to 6 months if history repeats itself.

My January 2025 MSTR price prediction is around $250 per share to be conservative. It's possible
that management does a share offering if the price of MSTR shares soars quickly. They could use that
money to buy more Bitcoin during the bull market since Saylor quoted "he would be buying the top
forever".

Of course, you can buy some call options to maximize your gains. My guess is MSTR has a very strong
Q4 with 3 bullish months in a row followed by a selloff in January as early MSTR investors take
profits.

That makes the following call option strikes dates extremely attractive to mid-term MSTR investors:

 October 15

 November 15

 January 17

All of these call options should print before expiration date so load up those MSTR call options if you
are bullish on Bitcoin over the next 6 months.

MSTR is a better play than Bitcoin miners such as CleanSpark (CLSK), MARA (MARA), or
Riot Blockchain (RIOT) because the company has a stronger accumulation strategy and doesn't dilute
shareholders as aggressively.

I also prefer MSTR over Bitcoin ETFs because you don't pay any expense ratio fees. Even just a small
0.25% can add up over 10 to 20 years if you have a long term investment horizon.
Final Thoughts

What's in store for MSTR? I have no clue but it's my current largest stock holding right now.

Beware of the upcoming crypto bear market in 2026 but things should be smooth sailing over the
next 3 to 6 months if history repeats.

I may take some profits on my call options in January 2025 and let my shares ride.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSTR either through stock
ownership, options, or other derivatives.I wrote this article myself, and it expresses my own opinions.
I am not receiving compensation for it (other than from Seeking Alpha). I have no business
relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation