Investors May Soon Prefer Bitcoin Over MicroStrategy Stocks

The annual growth of MicroStrategy (MSTR) shares has outpaced Bitcoin’s (BTC) returns by more than fourfold. However, analysts at Steno Research suggest that this premium may not last, as U.S. regulators are becoming more Bitcoin-friendly.

MicroStrategy, under CEO Michael Saylor, is currently among the largest public Bitcoin holders, having amassed 252,200 BTC—over $18 billion worth—by using leveraged funds to increase its reserves, including 62,000 additional coins this year alone.

A feature of the company’s strategy for accumulating Bitcoin is the attraction of borrowed funds. The company regularly places debt securities with a maturity of several years in order to increase its BTC balances.

Increased Bet On BTC Growth

As a leveraged BTC play, MicroStrategy’s stock price is highly responsive to Bitcoin’s movements. MSTR has surged more than 300% this year, compared to Bitcoin’s 7o% gain, largely because it serves as a BTC-accessible asset for traditional investors. This means that the yield of MSTR shares is 4 times higher than Bitcoin’s explained by the fact that the company has been attracting investors looking to gain access to Bitcoin through shares of public companies.

Regulatory Shifts Lean Investors To Direct BTC Purchases

However, this situation may change. Analysts from Steno Research believes that the implementation of positive expectations in the US crypto market regulation may push investors choosing to buy real Bitcoin, rather than shares, which can be perceived as an indirect form of investment in it.

In 2024, many countries began to reconsider their attitude to cryptocurrencies and their regulation. The approval of crypto ETFs in the United States this year was a sign of recognition of cryptocurrencies as an asset class along with traditional exchange instruments. At the same time, the politicians’ stance regarding the crypto market has changed, becoming a leading agenda before the November presidential elections in the United States.

Steno Research’s report also cautions that the current premium may not be sustainable long-term, referencing a historical premium of less than 200% during previous crypto market surges in 2021, which has only recently surpassed 300%.