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Bitcoin (BTCUSD) just had one of its best weeks in months, causing the stock most tied to its fate to rally. Strategy (MSTR), the software firm-turned-Bitcoin <a href="https://xpertsstudio.com/bnb-chain-surges-to-4-6b-in-tokenized-u-s-treasury-market/” title=”BNB Chain Surges to $4.6B in Tokenized U.S. Treasury Market”>treasury company formerly known as MicroStrategy, saw MSTR stock climb alongside the cryptocurrency this past week. The move has arrived after months of a painful drawdown that tested even the company’s most loyal shareholders.
For anyone who owns MSTR stock or is thinking about buying it, the last few days offer a reminder of how tightly the stock is bound to Bitcoin’s swings — in both directions. Let’s take a closer look.
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Bitcoin Price Rally Lifts Strategy Stock
Bitcoin broke above $80,000 this past week for the first time in about 15 weeks. The cryptocurrency climbed more than 25% in just 10 days to reach as high as $81,479, marking its strongest weekly rally since March 2023.
Strategy is the largest institutional holder of Bitcoin and is valued at a market capitalization of $48.9 billion. In the last month, MSTR stock has risen 32%. However, shares of the company also trade 65% below the 52-week high of $365.21 and are down 62% for the past year.
On the company’s second-quarter earnings call, Strategy Executive Chairman Michael Saylor explained that since Strategy began buying Bitcoin in August 2020, the crypto had climbed 32% while MSTR stock had climbed 42%.
Treasury Bond Buybacks and a Short Squeeze Pushed BTC Prices Higher
So, what sparked the ongoing Bitcoin rally? Reportedly, the answer has less to do with crypto-related tailwinds and more to do with the bond market.
Last week, the U.S. Treasury surprised investors by announcing it would double its long-term bond buyback operations from $2 billion to $4 billion per session, targeting 10-year, 20-year, and 30-year debt, per Yahoo! Finance. Treasury Secretary Scott Bessent said he has a large “toolkit” to address rising bond yields.
Bernstein analyst Gautam Chhugani told Yahoo! Finance that he expects the move to accelerate the debasement trade, where investors shift money out of cash and bonds and into scarce assets like Bitcoin. Chhugani’s base case calls for Bitcoin to hit $150,000 by mid-2027 and $300,000 by the end of 2029.
Source: finance.yahoo.com