MicroStrategy (NASDAQ: MSTR) describes itself as “the largest independent publicly traded business intelligence company, with the leading enterprise analytics platform.”
Bitcoin Rebound helps this company and ETFs
In other words, the company is a technology firm focused on the cloud computing industry, as highlighted by the following statement on its investor relations website: “MicroStrategy provides modern analytics on an open, comprehensive enterprise platform used by many of the world’s most admired brands in the Fortune Global 500. Optimized for cloud and on-premises deployments, the platform incorporates HyperIntelligence®, a breakthrough technology that overlays actionable enterprise data on top of popular business applications to help users make smarter, faster decisions.”
However, due to the company’s significant holdings of bitcoin, MicroStrategy is one of the most crypto-correlated stocks in the world. CEO Michael Saylor is a vocal bitcoin bull, and his company’s hope.com website is home to a variety of bitcoin articles, insights and videos.
Bottom line: MicroStrategy can and does move with bitcoin, and it makes sense for investors considering exchange-traded funds with exposure to the stock, including (BLKC ) and (SATO ). MicroStrategy is a top-10 holding in both funds.
These days, that’s a good thing because the biggest digital currency is in sharp decline from the “crypto winter” of 2022. Saylor began betting on bitcoin in a significant way nearly three years ago, telling investors it was a better use of MicroStrategy’s cash than allocating that capital to short-term, low-yield government bonds.
“Since then, Bitcoin has seen large price swings that have resulted in quarterly paper gains of as much as $3.1 billion and cumulative write-downs of more than $2.1 billion for MicroStrategy. The company’s holdings have been underwater at the end of the past three quarters, Bloomberg reported.
In news relevant to BLKC and SATO investors, these ETFs could be positioned for an additional MicroStrategy boost because the company’s cryptocurrency bets are close to turning a profit. In addition, the Virginia-based firm averaged down this year’s rally, adding bitcoin holdings at prices lower than initial purchases.
“MicroStrategy announced on Monday that it bought $150 million more of the cryptocurrency and paid off the rest of the $205 million loan partially backed by Bitcoin through the sale of shares. The latest purchase of 6,455 tokens from February 16 to March 23 was the largest acquisition of the company since April 2022,” according to Bloomberg.
SATO allocates 4.39% of its weight to MicroStrategy, while BLKC has an allocation of 1.79% to the share.
For more news, information and analysis, visit Crypto Channel.
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