MicroStrategy's leveraged bitcoin strategy has its stock outpacing BTC this year

 Microstrategy, which trades under the ticker MSTR, has seen its share price rise nearly 250% year-to-date.

The business intelligence company has leveraged its corporate bitcoin holdings to fuel exceptional performance to produce a staggering return that showcases its strategic positioning in both the enterprise software space and the cryptocurrency market.

At the beginning of 2024, MicroStrategy’s stock was already positioned for growth as it aimed to carry on the momentum from the 353% gain it returned in 2023.

This strong performance was driven by the stock acting as a proxy for investors who wanted exposure to bitcoin but through a publicly traded equity as the company holds a substantial portion of its reserves in bitcoin.

While bitcoin has posted strong gains in 2024 so far, the MSTR share price has far outperformed the cryptocurrency. At the time of writing, BTC has a 60% year-to-date return, compared to the nearly 4X higher return provided by MSTR.

This stark contrast highlights the degree to which MicroStrategy’s stock acts as a leveraged bet on bitcoin’s price movements.

MicroStrategy’s stock acts as a leveraged version of bitcoin. The company’s use of debt to finance its bitcoin purchases means that its stock price tends to move more sharply than bitcoin itself. When bitcoin rises, MicroStrategy benefits from amplified gains, as evidenced by the stock’s outperformance throughout the year.

MicroStrategy is the largest corporate holder of bitcoin, with 252,220 BTC valued at over $17 billion, at a total cost of around $9.9 billion.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.