Shares of MicroStrategy (MSTR -0.77%), a cloud-based analytics company, were flying high today on no company-specific news. Investors were instead likely reacting to the rising price of Bitcoin as the value of the cryptocurrency is on the rise.
MicroStrategy holds well over 100,000 Bitcoin tokens, so its shareholders react strongly to the price of the cryptocurrency. As a result, the tech stock was up by 20.8% as of 1:51 p.m. ET on Tuesday.
The price of Bitcoin reached an all-time high of $64,000 in 2021. But since late last year, the world's leading crypto has plummeted, and earlier this month it fell below $30,000.
But recently, Bitcoin has been gaining steam. Its price is $32,004 as of this writing, up 4% over the past 24 hours.
That's spurred a lot of optimism among MicroStrategy investors because the company says that it's "the world's largest publicly traded corporate owner of bitcoin" with over 129,200 coins.
MicroStrategy shareholders are no doubt pleased to see that Bitcoin appears to be on an upward trajectory, but they should also temper some of their expectations.
Bitcoin has seen its price plunge as investors have ditched more-speculative investments in favor of safer places to put their money. With investors worried about the economy as inflation sits at a nearly 40-year high and the Federal Reserve raises interest rates, cryptocurrency investments could remain especially volatile over the short term.
And considering that MicroStrategy's share price appears to rise and fall along with Bitcoin's price, it means the tech stock will likely remain a wild ride as well.