As a researcher, I find MicroStrategy’s entry into the MSCI World Index to be a significant development in the growing integration of cryptocurrency exposure into traditional investment portfolios. MicroStrategy’s co-founder, Michael Saylor, has been an advocate for Bitcoin and made headlines by allocating a substantial portion of the company’s cash reserves to the original cryptocurrency. With billions of dollars tracking or being benchmarked against MSCI’s global index, this inclusion underscores the increasing importance of cryptocurrency assets in investment strategies.
MicroStrategy, the globe’s leading Bitcoin hoarder among corporations, is set to join the MSCI World Index following its impressive surge in 2023 and the beginning of 2024. The value of MicroStrategy’s (NASDAQ: MSTR) shares has surpassed that of Bitcoin throughout the past year and the first quarter of 2024. On May 14, Tuesday, the stock price of MSTR rose by 4.15% as it hovered around $1,300.
MicroStrategy’s Entry Into MSCI Index A Bit Boost for MSTR?
On Tuesday, MSCI Inc. announced that MicroStrategy, a well-known enterprise software company, is now among the top three newcomers in the MSCI World Index with regard to market capitalization.
This finding underscores the rising trend of incorporating cryptocurrencies into conventional investment portfolios. With massive financial resources following or being compared to MSCI’s global index, the representation of companies like MicroStrategy signifies the escalating significance of digital currencies in investment plans.
As a financial analyst, I’ve noticed a developing trend towards the creation of new US and Hong Kong exchange-traded funds (ETFs) that directly invest in digital assets. This trend has the potential to pique the interest of more diverse investment products, such as multi-asset funds, over time.
As a researcher studying MicroStrategy’s recent financial moves, I can share that the company’s co-founder, Michael Saylor, is a prominent advocate for Bitcoin. Amidst the ongoing Covid-19 crisis, MicroStrategy gained attention by investing a significant portion of its cash reserves into the original cryptocurrency. By April 26, the company had acquired an impressive amount of 214,400 Bitcoins.
MSTR Stock Rally Ahead?
Over the past year, MicroStrategy’s (MSTR) share price has soared, increasing fourfold, outpacing Bitcoin’s price surge by an impressive 130%. When Bitcoin reached its record high of $74,000 earlier this year, MSTR stock followed suit, peaking at $1,919. However, it has since experienced a significant correction, dipping more than 30% in the past month.
To a great extent, Microstrategy is seen by its investors as a surrogate for owning Bitcoin. Nevertheless, the introduction of U.S.-listed spot Bitcoin Exchange-Traded Funds (ETFs) this year has put Microstrategy’s market leadership to the test.
In March, Kerrisdale Capital Management revealed its intention to sell MicroStrategy’s stock short due to concerns that the company’s rapid expansion was not commensurate with the significant increase in Bitcoin’s price. According to Bloomberg’s data, there are currently four buy ratings on MicroStrategy from analysts, with an average predicted price of $1,678.75 for the next 12 months. This figure is approximately 30% higher than the stock’s current value.
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2024-05-15 08:00