DIGIVESTASI - Bitcoin Price Soars, Michael Saylor Remains Optimistic, The price of Bitcoin has more than doubled this year, nearing its all-time high. While some investors remain cautious, one of Bitcoin's major supporters, Michael Saylor, who also serves as Executive Chairman of MicroStrategy (MSTR), remains confident in the potential of this cryptocurrency.

Under Saylor's leadership, MicroStrategy began investing in Bitcoin in 2020 with a purchase worth $250 million. As of November 10, 2024, the company owns 279,420 Bitcoin, with a total acquisition cost of about $11.9 billion, now valued at around $24.5 billion.

According to data from Motley Fool Stock Advisor, MicroStrategy's Bitcoin portfolio is now equivalent to about one-third of the company’s value, which stands at $73.3 billion, and about 1.4% of the total market capitalization of Bitcoin, which is currently at $1.8 trillion. Despite the continuing rise in Bitcoin's price, MicroStrategy continues to make purchases.

From October 31 to November 10, 2024, MicroStrategy bought an additional 27,200 Bitcoin for a total cost of $2.03 billion (about IDR 32.29 trillion), at an average price of $74,463 per Bitcoin.

Michael Saylor Predicts Bitcoin Price Will Keep Rising

Saylor predicts that Bitcoin will reach $100,000 by the end of 2024 and continue climbing to $13 million over the next 21 years. This forecast represents a potential increase of nearly 15,000% from its current price. Saylor also expects Bitcoin to grow from 0.1% of global market capitalization to 7%, as more financial institutions provide Bitcoin-related services. He believes Bitcoin will trade with a larger volume than the S&P 500, due to its open, global, and free nature.

A significant portion of Saylor's wealth is now directly tied to the price of Bitcoin. He personally owns 17,732 Bitcoin, valued at approximately $1.6 billion, which is nearly one-fifth of his estimated net worth of $8.3 billion. The remainder of his wealth comes from his 9.9% stake in MicroStrategy, largely valued based on the company’s Bitcoin holdings rather than its software business.

Is MicroStrategy's Bitcoin Strategy Sustainable?

MicroStrategy’s transformation into a major Bitcoin investor happened unexpectedly. Before 2020, the company was known as a slow-growing data analytics software provider. From 2013 to 2023, the company’s revenue declined from $576 million to $496 million, losing out to major cloud companies like Microsoft and Salesforce. To address this pressure, Saylor directed MicroStrategy to invest in Bitcoin.

To stabilize its software business, MicroStrategy has shifted to cloud-based services. Recently, the company launched an artificial intelligence (AI) platform called MicroStrategy AI, designed to help businesses integrate AI into their data applications. These cloud and AI initiatives are expected to stabilize its software business and generate more funds for future Bitcoin purchases.

However, while this long-term strategy holds promise, MicroStrategy's short-term prospects are less optimistic. Analysts predict that from 2023 to 2026, the company's revenue will grow by only about 1% per year, with the company expected to remain unprofitable under generally accepted accounting principles (GAAP).

MicroStrategy's Financial Risks and Pressures

MicroStrategy is under financial pressure as the impairment costs of its Bitcoin holdings exceed total revenues from its software business. The company has also taken on more debt and issued new shares to finance its Bitcoin purchases. As a result, its liabilities have quadrupled since the end of 2020, while the number of shares outstanding has more than doubled in the past four years. In fact, the company plans to raise $42 billion over the next three years to continue purchasing more Bitcoin.

For investors who are optimistic about Bitcoin and pessimistic about the U.S. dollar, MicroStrategy could be an attractive investment opportunity in the cryptocurrency world. If Bitcoin’s price continues to rise against the dollar, the value of the company's Bitcoin holdings could easily offset its dollar-denominated debt. However, if Bitcoin's price crashes, the company could face significant financial losses. This is a risky investment, but MicroStrategy's bold Bitcoin strategy could potentially drive the company’s stock price higher in the coming years.

Crypto Losses Surge, Reaching IDR 2.05 Trillion in October 2024

Meanwhile, losses from cryptocurrency hacks and frauds reached $129.6 million, or about IDR 2.05 trillion, in October 2024. Data from blockchain security company CertiK shows that exit scams caused $1.2 million in losses, flash loan attacks resulted in $1.5 million in losses, and exploits accounted for the largest losses, totaling $127 million.

The biggest incident in October involved Radiant Capital, a lending protocol that lost over $50 million after being hacked. Phishing attacks on several large investors (whales) also caused losses of around $36 million, while a hack at the M2 crypto exchange resulted in losses of up to $13 million.

Losses from exploits in October showed a 2.91% increase compared to losses in September, which totaled $123.4 million. However, this represents a 60% decrease compared to the $324.7 million lost in May 2024.

Radiant Capital Improves Security After Hack

The biggest incident in October involved Radiant Capital, which halted its lending market operations after the BNB Chain and Arbitrum markets were hacked. The hackers managed to access the protocol’s private keys and smart contracts, draining over $50 million in digital assets. Radiant Capital stated that it had updated its security mechanisms, including transferring ownership of the protocol to a timelock contract, which enforces a 72-hour waiting period for any adjustments.

Find more news and articles on Google News