MicroStrategy Inc. has emerged as a standout performer in the U.S. equities market since it pivoted to adopt bitcoin as its primary treasury-reserve asset four years ago. According to Greg Cipolaro, global head of research at NYDIG, MicroStrategy’s stock has achieved a remarkable 1,089% cumulative return since August 10, 2020, the day before the company announced its initial bitcoin purchase.
On Thursday, MicroStrategy revealed its latest move in the cryptocurrency space by acquiring an additional $786 million worth of bitcoin, further bolstering its total holdings to nearly $15 billion in this digital asset. This strategic shift towards bitcoin has significantly enhanced MicroStrategy’s stock performance, positioning it as one of the top-performing equities in the FT Wilshire 5000 index, which tracks actively traded U.S. stocks.
Cipolaro’s analysis indicates that MicroStrategy’s stock has been outperformed only by 19 other equities in the FT Wilshire 5000 index since it began its bitcoin strategy. Notably, it has closely trailed behind Nvidia Corp., a leading artificial-intelligence chip maker, which saw its stock rise by 1,114% over the same period. Despite this competition, MicroStrategy has consistently outperformed major benchmarks such as the S&P 500 and the Nasdaq 100.
Interestingly, MicroStrategy’s stock performance has even eclipsed that of bitcoin itself. While bitcoin has seen a notable 461% increase since 2020 and a 52% rise this year, MicroStrategy’s stock has shown greater growth due to its leveraged exposure to bitcoin. The company has achieved this through substantial debt issuance totaling $4.4 billion since 2020, which has funded the acquisition of 226,331 bitcoins.
This strategic move has made MicroStrategy the largest corporate holder of bitcoin, underscoring its unique position as a leveraged bitcoin investment vehicle within the stock market. Even with the introduction of spot bitcoin exchange-traded funds (ETFs) in the U.S. earlier this year, which could have theoretically reduced the appeal of holding stocks with significant bitcoin exposure, MicroStrategy’s stock has maintained its robust performance.
Despite fluctuations, MicroStrategy’s shares closed the week slightly lower at $1,483.76, according to Dow Jones Market Data, reflecting ongoing market dynamics influenced by both traditional financial metrics and the evolving landscape of digital assets.
In summary, MicroStrategy’s bold strategy to embrace bitcoin as a core part of its treasury reserve has not only differentiated it within the tech sector but has also driven substantial shareholder value, marking it as a unique case study in the intersection of traditional finance and cryptocurrency markets.