MicroStrategy’s Costly Bet on Bitcoin Fails to Outperform Gold to Date

Since August 2020, Strategy (formerly MicroStrategy) has invested substantial funds into Bitcoin through methods such as issuing new shares and convertible bonds, claiming that Bitcoin is “digital gold” and emphasizing its strategic value as an inflation-resistant reserve asset. Strategy has continued to accumulate Bitcoin between low and high points, ultimately accumulating over 50 transactions and holding more than 500,000 Bitcoins.

However, reflecting on this journey, what would have happened if these funds had been invested in gold or the S&P 500 instead? Based on the timing and amounts of each actual investment made by Strategy, we simulate alternative choices in a parallel universe: If gold or the S&P 500 had been purchased at that time, would the performance have been better or worse than Bitcoin?

Data Basis and Methodology

We conducted statistics based on data from Bitcoin Treasuries, covering over 50 investments (including the latest investment announced yesterday), with a total investment amount of approximately $3.51 billion. Based on these dates and amounts, we simulated the returns had the same amount been invested in gold or the S&P 500 index on the same day, holding until April 1, 2025.

Why Is Bitcoin’s Performance Not High Despite Its Significant Price Increase Compared to Gold?

According to the analysis results from ChatGPT (cross-referenced with Grok; please correct any errors), MicroStrategy’s Bitcoin strategy does indeed far exceed the S&P 500, but surprisingly, Bitcoin’s performance has not been much higher than that of gold, and it even lagged behind gold prior to today. (At the time of writing, Bitcoin was approximately $85,000.)

Looking solely at the price, although Bitcoin has risen from below $20,000 in 2020 to over $80,000, a significant portion of Strategy’s transactions were concentrated during the 2024-2025 period, particularly with a high proportion of purchases made at peak levels in 2025, resulting in an average holding price of $67,400 for Bitcoin.

• 2020-2021 accounted for about 35%-40% (low-cost period).
• 2022-2023 accounted for about 25%.
• 2024-2025 accounted for about 30%-40%.

In comparison, while gold has only increased by about 110% from 2020 to the present, its price trend has been stable, rising steadily from $1,500 to $3,159 without the risk associated with buying at high points.

Faith-Based Investment and Its Implications

Strategy’s investment in Bitcoin represents a rare instance of “extreme faith-based operation” in Wall Street history, which has not yet failed and has yielded considerable profits. However, based on the simulation results, had Strategy chosen to invest in gold, the final performance would not differ greatly from that of Bitcoin, and the liquidity of gold even far surpasses that of Bitcoin (making exit easier).

Overall, this article is not intended to deny the value of Bitcoin or to judge the superiority of gold versus Bitcoin, but rather to emphasize that even with faith, one should not overlook the importance of “timing for entry and cost control.”