MicroStrategy Inc. (NASDAQ: $MSTR) is a leading enterprise software company based in Virginia, USA. Founded in 1989, MicroStrategy is best known for its business intelligence, mobile software, and cloud-based services. Recently, it has made headlines for its bold foray into crypto.
It has transformed itself into a Bitcoin giant, becoming the largest corporate holder of the world’s most valuable digital asset. As of April 26, 2024, MicroStrategy had a staggering 214,400 Bitcoins in its reserves, which are currently valued at a whopping $13.5 billion.
Joining MSCI World Index
In a major development, MicroStrategy has earned a spot in the MSCI World Stock Index, a widely tracked global equity index covering around 85% of the free-float adjusted market cap in each nation. The company’s inclusion in the index, effective May 31, 2024, signals its growing influence in the financial markets.
According to MSCI Inc., MicroStrategy is one of the top three additions to the MSCI World Index by market capitalization. This recognition emphasizes the increasing integration of crypto exposure into traditional investment portfolios and highlights the growing importance of crypto assets in investment strategies.
MicroStrategy Outperforming Bitcoin
Listed as MSTR on the NASDAQ exchange, MicroStrategy’s stock has outpaced Bitcoin’s growth throughout 2023 and early 2024. As of May 14, the MSTR share price surged 4.15%, getting a few inches below the $1,300 mark, sparking speculation among investors and analysts about the possibility of further price rallies. On 15th May, it rallied 15% and closed above the $1,500 mark.
Over the past year, the share price of MicroStrategy (MSTR) has gained massively from a 52-week low of $266.00, beating the Bitcoin price rally. Earlier this year, when Bitcoin peaked at $74,000, the MSTR stock also rallied to $1,919, demonstrating the company’s close association with the digital asset.
MicroStrategy’s inclusion in the MSCI World Index is expected to provide the company with greater exposure to global liquidity, potentially fueling a significant MSTR price rally. With billions of dollars tracking or being benchmarked against MSCI’s global index, the addition of firms like MicroStrategy highlights the growing reputation of crypto assets in investment strategies.
Michael Saylor’s Influence
MicroStrategy’s co-founder, Michael Saylor, is a vocal Bitcoin advocate and has played a pivotal role in the company’s crypto strategy. Amid the COVID-19 pandemic, Saylor made headlines by allocating a portion of MicroStrategy’s cash reserves to Bitcoin, a bold move that has paid off handsomely.
Saylor believes that capital will continue to flow from other asset classes, such as gold and real estate, into Bitcoin, as the crypto is “technically superior to those asset classes.” He has also predicted that all retirement funds will eventually need some Bitcoin exposure, following the lead of the Wisconsin State Board of Investment’s $100 million investment in BlackRock’s Bitcoin Trust.
Challenges and Opportunities Ahead
While MicroStrategy’s inclusion in the MSCI World Index is a significant milestone, the company is not without its challenges. In March, Kerrisdale Capital Management LLC declared its decision to short the stock, citing concerns about the company’s rapid growth outpacing the Bitcoin price surge.
However, MicroStrategy currently boasts four analyst buy ratings, with an average 12-month price target of $1,678.75. This optimism reflects the potential for further price rallies on the horizon.
The launch of spot Bitcoin exchange-traded funds (ETFs) in the U.S. this year has also posed a challenge to MicroStrategy’s market dominance as a proxy for Bitcoin exposure. Nevertheless, the company continues to explore new opportunities, such as its recently announced plans to launch a Bitcoin-based decentralized identity solution.
Institutional Bitcoin Adoption on the Rise
MicroStrategy’s addition to the MSCI World Index is a significant milestone in the growing institutional adoption of Bitcoin and other cryptos. As more traditional investment portfolios integrate crypto exposure, the line between traditional finance and the digital asset space continues to blur.
The emergence of new U.S. and Hong Kong exchange-traded funds (ETFs) directly holding digital assets has further accelerated this trend. These ETFs could attract interest from products like multi-asset funds over time as investors seek exposure to the crypto market.
Experts’ Perspectives
While MicroStrategy’s performance has been impressive, some experts recommend that investors prefer Bitcoin over the company’s stock. CNBC host Jim Cramer has advised investors to buy Bitcoin instead of MicroStrategy, citing the digital asset’s potential for long-term growth.
Nonetheless, Michael Saylor’s bullish predictions and MicroStrategy’s continued accumulation of Bitcoin suggest that institutional Bitcoin adoption is set to increase further. As more traditional investors and funds embrace crypto, the industry’s overall maturity and acceptance are expected to grow.
MicroStrategy Stock Performance
MicroStrategy witnessed a remarkable surge in its stock price following the announcement of its inclusion in the MSCI World Index. At the market close on May 15, the company’s shares had soared by 15.86%, closing at $1,503. This represented a substantial gain of $205.84 per share, reflecting investor confidence and optimism surrounding MicroStrategy’s growing prominence in the crypto space as the largest corporate holder of Bitcoin. On Thursday. MSTR lost some of the previous day’s gains, sliding 3.76% to $1,447.00 as of 01:49PM EDT.
Should You Buy MicroStrategy Stock in 2024?
With MicroStrategy’s addition to the MSCI World Index and its massive Bitcoin holdings now valued at $13.5 billion, the company’s stock presents an opportunity for investors.
However, concerns remain about its rapid growth outpacing Bitcoin’s price surge. While analysts are optimistic, with an average 12-month price target of $1,678, some experts recommend investing directly in Bitcoin over MicroStrategy. Ultimately, the decision hinges on your risk appetite and belief in the company’s ability to successfully navigate the crypto space.
Click Here for Updates on MicroStrategy – It’s FREE to Sign Up for Text Message Notifications!
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.
