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Highlights
- MicroStrategy becomes one of the top three additions into the MSCI World Index.
- This provides MicroStrategy a greater exposure to global liquidity which could lead to major MSTR price rally.
- This development highlights growing crypto exposure to traditional investments.
MicroStrategy, the world’s largest corporate holder of Bitcoin, is now making its way into the MSCI World Stock Index after its stupendous rally in 2023 and early 2024. The MicroStrategy (NASDAQ: MSTR) share price has outperformed Bitcoin throughout last year and in early 2024. On Tuesday, May 14, the MSTR stock price rallied by 4.15% while trading just under $1,300 levels.
MicroStrategy’s Entry Into MSCI Index A Bit Boost for MSTR?
In a statement on Tuesday, MSCI Inc. stated that MicroStrategy, a prominent enterprise software maker, has become one of the top three additions to the MSCI World Index based on market capitalization.
This development highlights the increasing integration of crypto exposure into traditional investment portfolios. With billions of dollars tracking or being benchmarked against MSCI’s global index, the inclusion of firms like MicroStrategy underscores the growing importance of cryptocurrency assets in investment strategies.
This trend extends to the emergence of new US and Hong Kong exchange-traded funds (ETFs) directly holding digital assets, which could attract interest from products like multi-asset funds over time.
MicroStrategy’s co-founder, Michael Saylor, is well-known for his advocacy of Bitcoin. Amid the Covid-19 crisis, the company made headlines by allocating a portion of its cash reserves to the original cryptocurrency. As of April 26, MicroStrategy held a substantial amount of 214,400 Bitcoins.
MSTR Stock Rally Ahead?
Over the past year, the share price of MicroStrategy (MSTR) has quadrupled while beating by the Bitcoin price rally by a staggering 130%. Earlier this year, when the Bitcoin price touched its all-time high of $74,000, the MSTR stock also rallied to $1919. However, it has retraced more than 30% in a strong pullback over the past month.
Largely, the investors of Microstrategy view it as a proxy for holding Bitcoin. However, the launch of the spot Bitcoin ETFs this year in the U.S. have challenged MicroStrategy’s market dominance.
In March, Kerrisdale Capital Management LLC announced its decision to short the stock, citing its rapid growth outpacing the surge in the digital asset’s price. MicroStrategy currently boasts four analyst buy ratings, with an average 12-month price target of $1,678.75, nearly 30% higher than the stock’s current level, as per data compiled by Bloomberg.
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