There has been one tech company that has tied its fortunes directly to the price of Bitcoin ($BTC) and that is MicroStrategy (MSTR).

Gutsy is a word that would describe this direction, and some would even say it’s full out irresponsible.

The daring company has had to deal with fallout when bitcoin crashes and it was brutal in the PR world.

Yet as Bitcoin soars in price today, the co-founder of MSTR Michael Saylor should take a victory lap.

Saylor was on the receiving end of a great deal of scorn and criticism as Bitcoin tanked to $15,000 per coin.

Now the company is levering up some more to go bigger.

MSTR bought another 12,000 Bitcoin for $821.7 million, the second-largest purchase by the enterprise software maker since it began acquiring the cryptocurrency almost four years ago.

The fresh hoard raised MicroStrategy’s total Bitcoin holdings to around 205,000 tokens, or to more than $14 billion.

Saylor started buying Bitcoin in 2020 as an inflation hedge and alternative to holding cash. MicroStrategy has already spent more than $1 billion in Bitcoin in the first three months of 2024, more than half of last year’s total buying. The cryptocurrency is up around 675% since Saylor began buying.

The shift into Bitcoin has led to a revival in the share price of MicroStrategy, which has surged more than 1,000% since Saylor’s pivot.

The company’s market capitalization has increased to around $25.7 billion, topping the level that it previously peaked at in March 2000. MicroStrategy reached a settlement in December 2000 with the SEC over accounting fraud allegations.

The average price for the total holding is $33,706, according to the filing. Bitcoin reached a record high of more than $72,000.

The company also presides over a real software business and they believe that the combination of an operating structure including a bitcoin strategy will succeed.

MSTR’s focus on technology innovation provides a unique opportunity for value creation.

Being an operating company, MSTR’s software business remains a core revenue and cash flow generator.

In addition, it also enables them to acquire bitcoin through the use of excess cash or proceeds from equity capital raises or corporate debt capital raises and to pursue software innovations that leverage the bitcoin blockchain.

They’ve deployed these levers to increase bitcoin holdings in a manner that has created shareholder value.

Bitcoin development includes its Bitcoin acquisition strategy and Bitcoin advocacy initiatives.

MSTR’s software development includes BI, AI, Cloud, or Bitcoin and Lightning-related software development.

In 2024, they are hell-bent to shift focus to grow in AI plus BI, while accelerating a sharp transition to a cloud-centric operating model.

Key strategic goals are to grow cloud, innovate with AI, and increase profitability.

In December, they successfully deployed Google Cloud platform integration, furthering multi-cloud capabilities, and providing greater optionality to their customers.

I won’t say that MSTR’s software and cloud business will compete with the Silicon Valley Magnificent 7, but its existence is to support a risky Bitcoin strategy which is actually working effectively as we speak.

Sometimes risky bets pay off well.

Shares in this company will either skyrocket or go to zero depending on what Bitcoin does.

Cryptocurrency prices have been on a tear lately as bitcoin continues to rally on hopes a spot bitcoin exchange-traded fund will launch soon.

Last week Bitcoin had a 24-hour time period where it exploded 13% to the upside as the digital gold wakes up from its slumber.

Lately, it certainly is odd to see US treasury yield surpassing any type of volatility that crypto can offer proving that volatility is more about a time and place dynamic rather than a certain asset class.

The volatility meant that Bitcoin passed $35,000 for the first time since May 2022 even though it has pulled back a little today.

The rally could be fueled in part by investors who were betting against the crypto asset scrambling to cover short positions as well. 

Bitcoin led cryptocurrency prices higher over the past two weeks after the SEC declined to challenge its court loss against Grayscale Investments (GBTC) and its effort to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF on Oct. 13.

A U.S. appeals court ordered the SEC to review Grayscale's ETF application. The regulator could still reject the spot bitcoin application, but it would need a new justification to do so.

Institutional demand for a spot bitcoin ETF is stronger than ever before. For many institutions, it is a matter of when — not if — the SEC will approve a spot bitcoin ETF.

A spot bitcoin ETF would provide a regulated and accessible vehicle for bitcoin exposure, and also mark a major vote of institutional confidence.

MicroStrategy (MSTR) added 21% and the computer software company holds 158,245 bitcoin with an average purchase price of $29,582.

Sooner or later, unless regulation totally wipes out Bitcoin, crypto is likely to find itself finagling its way into 401K’s.

The longer it lingers around, institutional pockets, which are deep, will find a way to onboard it into its business model.

For many years, institutional money has stayed away from crypto primarily because it is built on nothing and most conservative investors want to see cash flow.

At least an asset like gold bullion, there is a physical nature of what one buys.

Yet, as the world becomes more digitized and globalized, institutional money is starting to take the bait.

To Bitcoin’s credit, the absolute collapse of volatility in the past few years has been an interesting talking point because too much volatility used to be the problem for this asset class.

There is a chance that as we begin to start a new economic cycle because of a Fed pivot, that $16,000 per Bitcoin at the end of December 2022 could register the low of the next cycle.

Bitcoin is more appealing as a risk-reward proposition now than it was exactly a year ago as the Fed embarked on an epic tightening cycle.

Throw into the mix that the quality of global government has cratered to a generational low and it makes sense for institutional backers from Blackrock to front-run the next bull market in crypto as capital looks to de-risk from fiat currencies.

This could finally end up being the run-up to $100,000 per bitcoin that everyone expected during the last bitcoin spike.

Readers can play this in the equity market by buying MSTR.