MicroStrategy, renowned as the largest corporate holder of Bitcoin (BTC), has been added to the MSCI World Index following a significant surge in its stock price. MSCI, a global provider of investment decision support tools, announced on Tuesday that MicroStrategy is among the three largest additions by market capitalization to its flagship equity index, effective May 31.
This inclusion marks a milestone for MicroStrategy, which recently expanded its bitcoin holdings on April 29, now totaling 214,400 BTC. These holdings are valued at approximately $13.5 billion, up 7% from previous valuations. With a total acquisition cost of $7.5 billion, or an average of $35,180 per BTC, MicroStrategy boasts a substantial paper profit of around $6 billion from its BTC investments.
MicroStrategy’s stock price has experienced a remarkable recovery, surging more than eightfold since its low in December 2022 alongside the broader cryptocurrency market. Year-to-date, its shares have risen over 87%, significantly outperforming Bitcoin’s 45% gains in 2024, according to TradingView data.
Despite this performance, investment firm Kerrisdale Capital, which holds a short position on MicroStrategy’s shares, argued in March that the stock was trading at an “unjustifiable premium” to BTC. This skepticism highlights the ongoing debate over the valuation of firms heavily invested in cryptocurrency.
Bitcoin Proxy Role Elevates MicroStrategy
MicroStrategy’s significant BTC holdings, which amount to over 1% of the total BTC supply of 21 million, have made it a popular proxy for bitcoin exposure in the traditional market. This was especially true before the U.S. launched spot BTC exchange-traded funds (ETFs) in January. The company’s addition to the MSCI World Index further underscores how BTC exposure is seeping into traditional investment portfolios, given that billions of dollars track or are benchmarked against this index, as noted by Bloomberg.
Moreover, MicroStrategy is not resting on its laurels. Earlier this month, the company announced plans to launch a bitcoin-based decentralized identity solution, continuing its innovative approach in the cryptocurrency space.
The inclusion of MicroStrategy in the MSCI World Index not only validates its strategic bitcoin acquisitions but also signals a broader acceptance of bitcoin within mainstream financial markets. As the trend of integrating bitcoin exposure into traditional investment vehicles accelerates, MicroStrategy’s role as a pioneer in this space becomes increasingly significant.