MicroStrategy’s stock price popped 6% on Thursday to above $230, touching a nearly 25-year high as a six-week rally for the world’s largest corporate holder of Bitcoin continued.

Less than two months ago, MicroStrategy shares were valued at $118, trending lower as Bitcoin hovered around $56,000 on Sept. 6. While the digital asset’s price has climbed 20% since then to $67,600, MicroStrategy’s share price has surged by comparison, nearly doubling over that period of time.

Shedding its label as an enterprise software firm, MicroStrategy has positioned itself as a Bitcoin development company.

Earlier this month, MicroStrategy co-founder and Executive Chairman Michael Saylor said that endeavor involves becoming a “Bitcoin bank,” which he had described as creating “Bitcoin capital market instruments across equity, convertibles, fixed income, and preferred shares.” The firm also previously disclosed plans to create a decentralized identity protocol on Bitcoin.

The company’s trove of 252,220 Bitcoin is currently valued at $17 billion, reflecting over 1% of all the Bitcoin that will ever be mined. Bringing Bitcoin onto its balance sheet for the first time in 2020, MicroStrategy’s game plan for acquiring Bitcoin has vastly transformed since then.

MicroStrategy has been leveraging equity and debt to purchase more Bitcoin than it could otherwise. This year, that’s involved issuing convertible notes, which can later be turned into shares by a buyer, and issuing equity through an at-the-money offering program.

The company offers leveraged exposure to Bitcoin, according to the asset manager Bernstein, which rated the company “Outperform,” with a price target of $290 in a report this week.

“We believe investors should view MicroStrategy as an active leveraged Bitcoin equity strategy,” Bernstein analysts wrote. “It actively toggles between equity and long-term convertible debt to offer leveraged exposure to Bitcoin while maintaining conservative leverage.”

While spot Bitcoin ETFs have seen over $20 billion worth of inflows this year, MicroStrategy’s Bitcoin embrace predates their launch in January. And Saylor said recently that he views the company as a bridge between traditional finance and digital assets serving a key role.

“If we didn't exist, then billions and billions of dollars of capital from the traditional finance markets wouldn't be invested in Bitcoin," he said. “The real MicroStrategy business is to be the leading issuer of securities in order to acquire Bitcoin.”

Alongside the recent rally in MicroStrategy’s share price, the company’s valuation has increased relative to its Bitcoin holdings, reflected as a premium to net asset value (NAV). As of Thursday, that premium reached 2.7x, its highest level since February 2021, according to MSTR-tracker.

With its stock price rising 426% over the past year, MicroStrategy’s returns have been “building a case” for its premium, Bernstein analysts wrote. Among factors driving MicroStrategy’s premium, the asset manager pointed to its proven ability to increase its Bitcoin holdings per share and a limited number of comparable investment vehicles offering leveraged exposure.

At the same time, MicroStrategy has some vocal critics, including the Bitcoin skeptic and economist Peter Schiff. On Tuesday, he argued on Twitter (aka X) that eventually MicroStrategy's valuation, and the merits of its Bitcoin strategy, will reverse course.

“MSTR has got to be the most overvalued stock in the MSCI World Index,” he wrote. “When it finally crashes, that's gonna be the real bloodbath.”

Edited by Andrew Hayward