With cryptos hinting at a potential price surge, there’s no better time than now to consider an entry into the digital assets market. And guess what? You don’t need a digital wallet to do so. We’re sounding the alarm on a worthwhile contender from the digital currencies realm that you can access from your brokerage account. Anyone looking to benefit from the potential oncoming price surge would be wise to consider this unique investment…
MicroStrategy Incorporated (MSTR)
MicroStrategy’s unique proposition as a hybrid between a traditional software firm and a Bitcoin investment vehicle makes it an appealing choice for investors seeking diversified Bitcoin exposure. The ongoing developments around Spot Bitcoin ETFs and MicroStrategy’s unwavering commitment to Bitcoin hold promise for the stock’s potential upside.
Here’s a deep dive into why MSTR is catching the eye:
- Bitcoin Proxy with a Unique Edge:
- MicroStrategy, under the helm of Michael Saylor, has positioned itself as a significant player in the Bitcoin ecosystem. As of October 31, 2023, the firm holds 158,400 BTC, acquired at an average price of $29,586 per Bitcoin, marking it the largest publicly traded corporate holder of Bitcoin.
- MSTR offers a unique way to gain Bitcoin exposure, complementing rather than competing with potential Bitcoin ETFs. The firm’s persistent Bitcoin acquisition, marked by an additional 6,067 BTC bought since Q2 2023, underscores a solid commitment to a Bitcoin-centric strategy.
- Institutional Bitcoin Adoption Catalyst:
- Spot Bitcoin ETFs, upon approval, are anticipated to act as a catalyst for institutional adoption of Bitcoin, creating an onramp for Wall Street capital. This, as per Saylor, would herald increased analyst coverage, education, and interest in Bitcoin, indirectly benefiting MicroStrategy.
- Robust Software Business:
- Besides its Bitcoin stance, MicroStrategy runs a lucrative software business, which pulled in revenues of $45 million and $21 million from software licenses and subscription services, respectively, in Q3 2023.
- This software business serves as a risk mitigator against Bitcoin’s price volatility, providing a stable revenue stream, which is a distinction not shared by prospective Bitcoin ETFs.
- Year-to-Date Performance:
- As of the latest data, MSTR stock has rallied about 197% year-to-date, outperforming Bitcoin’s price rise of approximately 108% in 2023. Since initiating its Bitcoin acquisition strategy on August 10, 2020, until October 31, 2023, MSTR stock has surged 242%, while Bitcoin appreciated 192%.
- Analyst Perspective:
- Analyst Lance Vitanza from TD Cowen notes that while a low-cost Spot Bitcoin ETF could divert some demand from MSTR, many investors would continue to favor MSTR due to its bitcoin exposure sans the management fees typical of ETFs. Additionally, any downside in BTC value could be partially offset by the stability of MicroStrategy’s underlying business, providing a layer of protection not available with Spot ETFs.
