MicroStrategy could surpass the market caps of Starbucks and Nike if Bitcoin soars to $138K.

Over the course of 2024, MicroStrategy added 249,850 BTC to its reserves, bringing its total holdings to an impressive 439,000 BTC. This strategy has contributed significantly to the company’s stock price surge, which has increased by 546% year-to-date. As a result, MicroStrategy’s market cap has reached $99.4 billion, putting it on the brink of surpassing major American corporations like Starbucks and Nike.

One of the key reasons behind MicroStrategy’s significant gains is its reliance on Bitcoin as a long-term store of value. In a bull market, Bitcoin’s price tends to rise due to increased adoption, institutional investment, and growing investor confidence. MicroStrategy has become a pioneer in this strategy, using Bitcoin as a foundation for its financial decisions.

MicroStrategy’s market cap could surpass Starbucks ($105.5 billion) with a mere 11% Bitcoin rally to $118,810. A more ambitious 32% rally to $140,000 per BTC would push MicroStrategy’s market cap past Nike’s current valuation of $115 billion. These price targets are based on Bitcoin’s historical performance, as well as MicroStrategy’s substantial BTC holdings.

Currently, MicroStrategy holds the largest corporate treasury of Bitcoin, with 439,000 BTC—far surpassing Marathon Digital’s holdings of 40,435 BTC by a staggering 985%. The direct correlation between Bitcoin’s price movements and MicroStrategy’s market cap is undeniable. For every $1,000 increase in BTC’s price, MicroStrategy’s market cap rises by approximately $440 million. This relationship reinforces the idea that as Bitcoin’s value increases, MicroStrategy’s financial standing improves significantly.

MicroStrategy has employed a controversial but strategic approach by using debt to finance its Bitcoin purchases. This method, often criticized, has been described by some as risky or unsustainable. However, advocates believe that Bitcoin’s long-term value appreciation justifies such a strategy.

Chainlink advocate Zach Rynes has voiced concerns about MicroStrategy’s reliance on debt, expressing discomfort with the company’s “debt-based acquisition” model. Yet, Ki-Young Ju, CEO of CryptoQuant, has taken a more optimistic stance. Ju pointed out that MicroStrategy’s Bitcoin strategy would only face significant challenges if a catastrophic event like a global crisis or a sudden market crash were to occur. In a post on X, Ju stated:

“MicroStrategy only goes bankrupt if an asteroid hits Earth. For 15 years, Bitcoin has never dropped below the cost basis of long-term whales, which currently stands at $30K.”

With MicroStrategy’s debt sitting at $7 billion and its Bitcoin holdings valued at around $47 billion, Ju argues that the company’s financial risks are manageable and outweighed by its substantial BTC reserves.

MicroStrategy’s calculated approach to accumulating Bitcoin has positioned it well to potentially reshape corporate market cap rankings. If Bitcoin continues to perform strongly, driven by increased adoption, institutional investments, and macroeconomic factors, MicroStrategy remains well-positioned to benefit from these upward trends. The company’s strategy of using Bitcoin as both a reserve asset and a source of growth could redefine its market cap in the coming years, highlighting the growing influence of Bitcoin in the corporate world.

In conclusion, while MicroStrategy’s method of debt-fueled Bitcoin accumulation has its critics, the long-term prospects appear promising. By monitoring Bitcoin’s price movements and staying disciplined in its investment strategy, MicroStrategy could unlock substantial market cap gains, potentially elevating its status beyond some of America’s biggest corporations.