Bitcoin (BTC) broke through $72,000 the day before yesterday, hitting a new all-time high for the first time since the cryptocurrency’s 2021 rally. The crypto community has been warmly welcoming the latest surge in the world’s largest cryptocurrency. However, arguably no one will be celebrating more than Michael Saylor, the man behind the company that holds the title of the world’s largest Bitcoin investor.

Bitcoin price rise

On Monday, Bitcoin hit a new record high of $ 72,910 , as its meteoric rise shows no signs of stopping.

Bitcoin, the largest digital asset, has captured investor interest again after nearly a dozen new spot bitcoin exchange-traded funds (ETFs) were approved earlier this year, as well as optimism that the Federal Reserve will soon start cutting interest rates.

Investment in the top 10 U.S.-based spot bitcoin ETFs fell slightly to a two-week low in the week leading up to March 8, but still raised nearly $2 billion, according to LSEG data.

“Bitcoin started the week on a high note, dragging the entire cryptocurrency market higher with it,” said Nick Cowley, strategist at DailyFX.

With the Bitcoin supply hitting 21 million coins, investors are rushing to join the ongoing bull run ahead of the April halving event, which is set to further reduce the supply.

This event, which occurs every four years, cuts the number of new coins entering the market and halves the reward for mining them, giving the price of Bitcoin a historic boost.

Michael Saylor 's MicroStrategy Buys More Bitcoin

Bitcoin's surge to a new all-time high came after MicroStrategy, an enterprise software company founded by Michael Saylor, made another major investment in the leading cryptocurrency.

According to filings with the Securities and Exchange Commission, the company bought 12,000 bitcoins for $821.7 million, marking its second-largest purchase since it began investing in the digital currency nearly four years ago.

The latest investment boosts the company’s Bitcoin portfolio to nearly 205,000 tokens, worth more than $14 billion. The purchase, which took place between February 26 and March 10, was funded primarily with proceeds from MicroStrategy’s recent sale of $800 million convertible notes.

Under Saylor's leadership, Smart Business turned to Bitcoin in 2020 as a strategy to hedge against inflation and as an alternative to cash reserves.

In the first quarter of 2024 alone, the company’s investments in Bitcoin exceeded $1 billion, more than half of the total spent last year. Since Saylor began his Bitcoin acquisitions, the value of the digital currency has increased by nearly 675%.

Furthermore, MicroStrategy’s Bitcoin venture has led to a remarkable recovery in its stock price, which has risen more than 1,000% since it began this strategic shift. The company’s market cap now stands at around $25.7 billion, surpassing its peak in March 2000.

The company's average acquisition price per Bitcoin so far is $33,706, while the average purchase price of the latest batch is $68,477 per token.

What do analysts say about MicroStrategy?

Following its new investment in Bitcoin, Canaccord Genuity analysts said the company’s aggressive Bitcoin purchases add further leverage to MicroStrategy.

The broker raised the target price for the stock to $1,810.

While MicroStrategy primarily funded its Bitcoin acquisitions in the latter part of 2023 and early this year through stock sales via at-the-market (ATM) offerings, the company has chosen to diversify its financing approach by leveraging its entire capital structure through a convertible bond issuance, Cancord analysts said.

“More importantly, just as putting debt to work can increase balance sheet returns on equity, purchasing those additional bitcoins via the convertible notes helped increase MicroStrategy’s equity premium relative to its equity returns via the convertible notes to about 86% according to a sum-of-the-parts (SOTP) analysis,” the analysts wrote.

The analysts added: We also attribute this record high premium to the rise in the spot price of Bitcoin as volatility drives demand for MicroStrategy options.

They also noted that MicroStrategy's practice of issuing shares at a premium to acquire more Bitcoin could positively impact its stock price.

They demonstrated this through a detailed analysis, which included a hypothetical scenario in which the company sells $500 million in stock to buy Bitcoin, benefiting from an 86% premium in the SOTP valuation.

The Cancord team wrote: The bottom line here, according to our analysis, is that such a purchase results in a price increase of about $23 per share.

They added: “Although the increase is small on a percentage basis, the fact that MicroStrategy has created a model for acquiring Bitcoin in the first place is noteworthy and it is working, at least for now.”

Bitcoin prices have already risen more than 70% this year, while MicroStrategy shares have seen triple-digit gains of 142% during that time.