MicroStrategy (MSTR) Stock Stares At Massive Breakout, Will BTC Price Catch Up?

MicroStrategy, the world’s largest corporate Bitcoin holder and a proxy bet for investors, is seeing strong bullish action on Wall Street. The MSTR stock price is currently at a 6-month trading $192.20 level as of Tuesday’s closing, and eyeing a major breakout above $200. If history repeats, the BTC price will soon catch up with the MSTR stock gains, leading to a surge to $70,000 and beyond.

MicroStrategy Stock on Investors’ Radar

The MicroStrategy stock has seen strong buying interest in recent times with a staggering 53% recovering over the past month. This proxy Bitcoin bet has consistently outperformed the BTC price gains ever since the company adopted the Bitcoin strategy in August 2020.

Since then, in the last four years, the MSTR stock is up by 1208% while BTC has gained 445% in the same period. Furthermore, it stands second among the top ten best-performing stocks of the S&P 500 in the last four years. Companies worldwide have started adopting the MicroStrategy Bitcoin playbook with Japan’s Metaplanet making similar moves with consistent BTC acquisition.

In a report note earlier this week on Monday, Markus Thielen, founder of 10x Research, stated that despite the stock price being 44% overvalued in comparison to Bitcoin, it will continue to gain more strength once it crosses $180. He wrote:

“Market makers may be forced to hedge their short gamma exposure as they likely sold calls to retail investors), and hedge funds holding $4.6 billion in short positions on MicroStrategy shares could face pressure to cover those shorts if the price surpasses the $180 mark”.

This rally could also push Microstrategy to raise even more debt to acquire additional BTC. Thielen added: “Raising even more debt to purchase bitcoin seems logical. A breakout in MicroStrategy’s stock could have a ‘tail wags the dog’ effect, where the momentum in its shares positively impacts Bitcoin’s price, creating a feedback loop.”

Will BTC Price Catch Up?

Bernstein analysts believe that the MSTR stock can rally another 64% from the current levels surging to $290. The MSTR stock has always been a leading indicator of what’s coming for Bitcoin. On the monthly chart, the BTC price is up 14% while MSTR is up by 54%.

As of press time, the Bitcoin price is trading at $62,363.54 levels with a market cap of $1.232 trillion. Thus, if it catches up to MSTR, it can trigger a Bitcoin rally all the way to $70,000 and beyond.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast with a keen understanding of financial markets. His interest in economics and finance has led him to focus on emerging Blockchain technology and cryptocurrency markets. He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.