MicroStrategy's transition to the bitcoin market also signals that large companies are increasingly interested in cryptocurrency.
I'm not sure that's really the case. MSTR seems to be an anomaly as far as corporations choosing to hold bitcoin as their treasury reserve, and I think I read about one other company doing that or something similar. But I really,
really don't think it's going to become a trend.
For one thing, look at how much bitcoin MSTR bought. Didn't I read that it was like 0.2% of the total bitcoin supply? And that's just from one company! There isn't enough bitcoin to go around if 500 companies wanted to start buying it.
And another thing is that it's extremely risky for any corporation to do what MSTR did, and I'm thinking about bitcoin's historic volatility alone, never mind all the other reasons I could probably come up with.
But there is also a downside to this, because it is possible that MicroStrategy may engage in large bitcoin sales to compensate for losses, which could adversely affect the price of the bitcoin.
Yeah, I think I wrote about that in one of my last posts about MSTR. A situation might eventually come along that forces them to liquidate their entire
BTC position, and that might have a really bad effect on its price, unless they arrange a private deal or something.
I'm going to keep following this, and I have MSTR on my stock watch list. And I'd definitely agree that it's overvalued with a P/E of 68.59. That's probably the result of the bull market that's been ongoing since around 2009 or so.