MicroStrategy Inc., a company renowned for its massive Bitcoin holdings, will be added to a crucial global equity index following a surge in the firm’s shares that outpaced the digital asset. The Tysons Corner, Virginia-based enterprise software maker is one of the largest additions to the MSCI World Index based on market capitalization, MSCI Inc. announced on Tuesday.
This move signifies how exposure to cryptocurrencies can gradually seep into traditional portfolios. As many billions of dollars track or are benchmarked against MSCI’s world gauge, other avenues include new US and Hong Kong exchange-traded funds that directly hold digital assets and which may attract the interest of products such as multi-asset funds over time.
MicroStrategy’s co-founder Michael Saylor has been a vocal advocate for Bitcoin. In response to the Covid-19 pandemic, he decided to invest some of the company’s cash into the original cryptocurrency. As of April 26th, MicroStrategy held 214,400 Bitcoin.
Shares in MicroStrategy have skyrocketed over the past year, increasing by more than four times their value, beating a rise of almost 130% in Bitcoin during a recovery from a 2021 crypto rout. The company is viewed as a proxy for exposure to the token; however, this role has come under scrutiny in light of January’s debut of US Bitcoin ETFs.
In March, Kerrisdale Capital Management LLC announced that it was shorting MicroStrategy stock since it was outperforming the surge in Bitcoin’s price. As of now, there are four analyst buy ratings with an average 12-month price target of $1,678.75 – almost 30% above MicroStrategy’s current stock price level according to data compiled by Bloomberg.
