What Does MicroStrategy Do?
MicroStrategy is an established enterprise software company that has made bitcoin a cornerstone of its financial strategy. Founded in 1989 by Michael J. Saylor and Sanju Bansal, the company specialises in data analytics, mobile software and cloud services.
Headquartered in Tysons Corner, Virginia, MicroStrategy is also the largest public corporate holder of bitcoin, with over $40 billion (402,100 BTC) in assets. The company, led by Saylor, believes that bitcoin is an excellent store of value and a key asset for long-term growth.
In 2023, the company announced a substantial plan to raise $42 billion over three years, aimed at increasing its Bitcoin holdings, illustrating its aggressive approach to leveraging its software revenue and stock issuance for cryptocurrency investment.
MicroStrategy’s Bitcoin Endgame programme aims to aggressively accumulate bitcoin. The company has purchased over 200,000 BTC in 2024, including a record buy of 55,500 BTC at an average price of $97,862 per coin, highlighting its willingness to pay any price.
Overview of MicroStrategy
MicroStrategy is a renowned business intelligence and analytics platform that empowers organizations to extract meaningful insights from their data repositories. It is a comprehensive suite of tools that enables users to access, analyze, and visualize data from various sources. MicroStrategy’s key components include analytics, mobile, library, and cloud, collectively delivering a multifaceted approach to analytics and business intelligence. By leveraging these tools, organizations can make data-driven decisions, enhance operational efficiency, and drive business growth.
How MicroStrategy Works
MicroStrategy is a comprehensive business intelligence and analytics platform that transforms raw data into actionable insights. It connects to diverse data sources, including databases, spreadsheets, and cloud-based repositories, ensuring seamless data integration. At the core of its architecture is the semantic layer known as Intelligent Cubes, which offers a logical representation of data. This allows users to create reports and dashboards without extensive SQL knowledge, making data analytics accessible to a broader audience.
The platform’s architecture includes vital elements like the Intelligence Server, which manages user requests and ensures efficient data processing. Additionally, the metadata layer maintains consistency and security across the system, providing a robust framework for data governance. By combining these components, MicroStrategy delivers a powerful solution for organizations to harness the full potential of their data.
Key Features and Capabilities
MicroStrategy offers a robust analytics engine, facilitating data exploration, predictive analytics, and seamless integration with Big Data technologies. Its key features include:
Data Discovery Capabilities. Foster a data-driven culture by enabling users to explore and analyze data intuitively.
Data Wrangling Capabilities. Simplify the data preparation process, allowing users to clean and transform data efficiently.
Advanced Analytics Capabilities. Enable users to predict future trends and outcomes, providing a competitive edge.
Interactive Dashboards and Mobile Platforms. Provide instant access to critical business information, ensuring decision-makers are always informed.
Embedded BI Capabilities. Allow organizations to embed analytics directly into their applications and portals, enhancing user experience.
Unified Platform for Analytics and Business Intelligence. Collaborate and ensure consistency in data interpretation across the organization.
These features collectively empower organizations to leverage their data effectively, driving innovation and strategic decision-making.
Applications and Use Cases
MicroStrategy has transcended its role as a mere analytics tool to become an indispensable asset across diverse industries. Its applications cater to businesses’ unique needs and challenges, including:
Retail. Enhancing customer experiences and optimizing operations through data-driven insights.
Finance. Providing robust analytics for risk management, fraud detection, and portfolio optimization.
Healthcare. Contributing to improved patient outcomes and operational efficiency by analyzing clinical and operational data.
Manufacturing. Enhancing supply chain visibility, monitoring production processes, and optimizing resource allocation.
Telecommunications. Analyzing network performance, understanding customer preferences, and optimizing service delivery.
Education. Optimizing student performance, managing resources effectively, and enhancing institutional effectiveness.
Government. Facilitating data-driven policy formulation, resource optimization, and performance monitoring.
Hospitality. Enhancing guest experiences by providing insights into preferences, streamlining booking processes, and optimizing hotel operations.
These use cases demonstrate MicroStrategy’s versatility and its ability to address the specific needs of various sectors, making it a valuable tool for organizations worldwide.
Why is MicroStrategy buying digital asset bitcoin?
In 2020, MicroStrategy began buying bitcoin as part of a bold shift in its financial strategy to combat growing economic uncertainty. Michael Saylor called bitcoin’s fixed reserve of 21 million coins a critical defense against inflation and devaluation of fiat currencies, highlighting its value as a digital asset.
He argued that bitcoin’s decentralized nature and scarcity make it a better store of value than traditional assets such as cash. Saylor called this approach a strategy “bitcoin treasury” aimed at repositioning the company’s reserves for long-term stability and growth.
To fund bitcoin acquisitions, MicroStrategy raises funds by issuing shares and convertible bonds, which are financial instruments that allow investors to convert their bonds into shares in the company under certain conditions.
MicroStrategy plans to become a bitcoin bank
Beyond Treasury, MicroStrategy also plans to become a “bitcoin bank” as part of its long-term vision. This vision came to fruition in 2024 when Michael Saylor stated that bitcoin could function like “Google or Facebook for money.”
Saylor emphasized that Bitcoin could potentially evolve into a significant form of digital capital, enhancing returns for investors despite the underlying risks and volatility associated with cryptocurrencies.
The company aims to reach a trillion-dollar valuation by developing bitcoin-based capital market instruments. Saylor outlined MicroStrategy’s plans to offer equities, convertible bonds, and fixed income products through “capital recycling,” which is far superior to traditional financial strategies.
MicroStrategy stock share price rises
In 2024, MicroStrategy stock soared by 500% to $395, driven by strong retail investor activity and growing institutional interest. The surge coincided with the company’s bold accumulation of bitcoin, which now has a total value of more than $40 billion, as well as strategic financial manoeuvres.
MicroStrategy raised $10.5 billion through stock sales and $3 billion through convertible bonds. The company’s shares also gained exposure through two leveraged ETF funds: the Defiance Daily Target 2X Long MSTR(MSTX) and the T-Rex 2X Long MSTR Daily Target(MSTU).
Analysts, including Benchmark, forecast a target share price of $650, attributing it to the company’s innovative treasury operations and dominance in bitcoin-backed instruments, despite concerns about the high premium and the fact that the company is unlikely to enter the S&P 500.
How is MicroStrategy using bitcoin to make money?
MicroStrategy’s strategy for profiting from Bitcoin, a digital asset, goes beyond simple buy-and-hold tactics. Here are the main ways to use bitcoin:
Raising capital via stocks and bonds: MicroStrategy raised $750 million via stocks in 2024 and $2.6 billion in convertible bonds with a 0% rate through 2029.
Bitcoin-backed loans: Using bitcoin as collateral, the company obtains loans for operations or further acquisitions without selling its assets.
Bitcoin Yield: This concept reflects the increase in bitcoins per share, creating value for shareholders over time.
Bitcoin Volatility: By borrowing at low or zero interest rates, MicroStrategy profits by betting that the long-term appreciation of bitcoin will exceed its value.
Is MSTR Company Overvalued?
MicroStrategy’s stock has been a topic of interest in the business intelligence community, with many considering it a unique approach to investing in cryptocurrency. The company’s aggressive foray into Bitcoin has made it a market beater, with its stock price soaring over 700% over the past year and more than 2,600% since late 2019. However, some analysts argue that the stock has arguably become a bubble, with a massive premium to its underlying Bitcoin. As the company continues to accumulate Bitcoin, its stock price is likely to be heavily influenced by the cryptocurrency’s performance.
While MicroStrategy’s software business generates significant revenue, its Bitcoin-centric balance sheet reduces the need for its analytics business to chase short-term profits. Ultimately, whether MicroStrategy is overvalued depends on one’s perspective on the company’s Bitcoin strategy and its potential impact on the stock price. The debate continues, with some viewing it as a visionary move and others as a risky gamble.
Is MSTR company overvalued?
The question of whether MicroStrategy (MSTR) is overvalued is a matter of differing opinions among analysts and investors. Some argue that MSTR’s premium valuation(2.20x) relative to its bitcoin shares reflects its innovative treasury strategy and bitcoin yield potential, with proponents like Adam Back suggesting a fair value of $485-$585 per share.
Saurabh Abhyankar, the chief product officer of MicroStrategy, emphasizes the significance of their data analytics products amidst the company’s focus on Bitcoin, illustrating the importance of leadership roles in driving product development.
Others point to the company’s large leverage, noting that its $9 billion in debt is pegged at 386,700 BTC, amplifying the risk during a bitcoin price drop. Sceptics point out that MSTR’s 2.5 times volatility against bitcoin makes it a high-risk proxy for cryptocurrency exposure, recommending alternatives such as bitcoin ETFs.
How much bitcoin holdings will MicroStrategy buy?
As of March 2025, MicroStrategy owns 470,100+ BTC, or 1.91% of bitcoin. Michael Saylor has made it clear that his goal is to buy as many bitcoins as possible before prices jump from 100,000 to $13 million per coin by 2045.
While the company doesn’t disclose a specific end goal, Saylor’s statements and strategy suggest that current holdings will double or even triple. In 2023, the company announced its goal to double or triple its current Bitcoin holdings, leveraging stock premiums and interest-free bonds to achieve this. By issuing interest-free bonds and using stock premiums, MicroStrategy has created a system designed to permanently acquire bitcoin.
Analysts believe the company’s bitcoin holdings could reach nearly 1 million BTC in the coming years, depending on market conditions and available capital. By comparison, currently ETF bitcoin funds hold more than 1.1 million BTC and the U.S. government holds about 207,000.
MicroStrategy’s Risks
Investors today are concerned about MicroStrategy’s aggressive Bitcoin strategy and the potential risks it faces in volatile markets, particularly given Bitcoin’s nature as a digital asset. Typically, they are drawing parallels to the 2022 collapse of Terra Luna and FTX, which triggered a devastating cryptocurrency bear market that lasted nearly two years.
Here are the main risks associated with MicroStrategy:
Bitcoin price volatility: A sharp drop in the bitcoin price could jeopardise MicroStrategy’s ability to service its debt and maintain liquidity.
Debt: The company’s $9 billion in debt, much of which is tied to bitcoin, poses significant repayment risks during an economic downturn.
Liquidity risks: Loans secured by bitcoins could trigger margin calls during a sharp price drop, forcing MicroStrategy to liquidate assets.
Shareholder dilution: Frequent share issues could disappoint investors if bitcoin price growth slows or stops.
Regulatory uncertainty: increased scrutiny of cryptocurrency ownership and transactions could lead to operational or legal challenges (a less likely risk under the Trump administration).
During the Terra Luna and FTX crises, many speculated that Michael Saylor and MicroStrategy were facing liquidation. At the time, Saylor stated that a margin call would only occur if bitcoin fell below $21,000, and liquidation would require a drop below $3,562.
While today’s liquidation levels are clearly higher, the company has demonstrated experience managing such stress tests before.
MicroStrategy Holdings of Michael Saylor
Michael Saylor owns 19,998,580 shares of MicroStrategy Class B common stock, representing 9.9% of the outstanding shares and approximately 45% of the voting power. This ownership structure was significantly affected by the 10:1 stock split on 8 August 2024 for both Class A and Class B shares.
In addition, Saylor personally owns 17,732 bitcoins worth about $1.6 billion, representing nearly 20% of his wealth of $8.3 billion. Saylor’s significant Bitcoin holdings underscore his belief in its potential as a form of digital capital, capable of transforming investment strategies. All in all, this has allowed Michael Saylor to become the face of bitcoin, despite being an early critic in 2013.
Is MicroStrategy doing business intelligence outside of bitcoin?
A very frequent question on the net is whether MicroStrategy is still running its original business outside of Bitcoin, particularly its BI platform. The answer is yes, as MicroStrategy continues to operate its software business, generating $116.1 million in revenue in the third quarter of 2024, though that figure is down 10.3% year-over-year.
Conclusion
After 30+ years in business, MicroStrategy has changed its trajectory with an unprecedented focus on bitcoin, and is often in the headlines for its relentless BTC acquisitions.
Since switching to bitcoin in 2020, Michael Saylor has not only increased his personal fortune, but has also put the company at the forefront of corporate cryptocurrency adoption.
MicroStrategy’s real-time analytics capabilities have also played a crucial role in its success, enabling quick decision-making and operational efficiency.
Will MicroStrategy’s audacious bet to amass 1 million BTC pay off, or will the company be the first major domino to fall in the next bear market? Only time will tell.
Source: https://coinpaper.com/7827/what-does-micro-strategy-do-a-comprehensive-overview-of-their-services