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MicroStrategy Joins MSCI World Index, Why It Could Be a Big Deal For Crypto 

Last Updated May 15, 2024 4:36 PM
Shraddha Sharma
Last Updated May 15, 2024 4:36 PM

Key Takeaways

  • MSCI adds MicroStrategy to its ACWI Index.
  • MicroStrategy’s Bitcoin holdings and stock performance are crucial for the crypto market.
  • The inclusion in the index could be good for the visibility of a BTC-backed company. 

MicroStrategyInc., the largest public Bitcoin holder, has been added to the MSCI ACWI Index.

The inclusion is notable due to the index’s popularity with institutions and its substantial benchmarked assets. The company’s stock performance driven by Bitcoin holdings has helped the company enter the index. 

MSCI Adds MicroStrategy: What It Means

On May 14, MSCI announced the addition of MicroStrategy, along with two other companies, Pure Storage, and Emcor to the MSCI ACWI Index.

The move is significant because the MSCI ACWI Index , which tracks mid and large-cap equities across developed and emerging countries, has over $4t benchmarked to it. 

Institutions widely use this index, and inclusion in it can bring increased visibility and investment to the companies involved.

MicroStrategy’s inclusion follows a strong performance in its stock, driven by its substantial Bitcoin holdings. 

As per Bitcoin Treasuries, the company owns approximately 214,400 BTC, valued at around $13.9b. The massive accumulation has been a strategic move by MicroStrategy, positioning it as the biggest Bitcoin player in the public market.

Understanding MicroStrategy’s Bitcoin Strategy

The company has been accumulating Bitcoin since August 2020, viewing it as a long-term store of value. This investment has grown significantly, with the ratio of current Bitcoin value to cost basis at 1.85x, meaning the current value is 1.85 times the initial investment.

MicroStrategy’s market capitalization is $22.1b, and its enterprise value is $26.5b. The stock price has risen dramatically, now at $1,390 per share. 

Since the first reported Bitcoin balance in August 2020, Bitcoin has increased by 447% against the USD, while MicroStrategy’s stock has surged by 952% against the USD. When compared directly to Bitcoin, the stock has outperformed, rising 92.3%.

The Importance of the MSCI ACWI Index

The MSCI ACWI is a widely recognized benchmark launched in 1990. The MSCI ACWI captures large and mid-cap representation across 23 developed markets and 24 emerging markets countries, covering approximately 85% of the global investable equity opportunity set with 2,840 constituents. 

The inclusion can lead to increased investment from institutional investors who benchmark against this widely recognized index, which often boosts stock prices and enhances the company’s market visibility and credibility. The development is particularly notable for the cryptocurrency sector, given MicroStrategy’s substantial Bitcoin holdings.

Analyst Jesse Olson noted that MicroStrategy’s stock recently hit four downside targets, signaling potential buying opportunities. The technical analysis suggests that the stock could see further upward movement in the near term.

More Upside for MSTR

MicroStrategy’s inclusion in the MSCI ACWI Index could lead to further upside for the stock. Meanwhile, the strong performance on the back of MSTR’s Bitcoin holdings has integrated the company into the mainstream financial market at a crypto intersection. 

As institutions continue to benchmark against the MSCI ACWI Index, MicroStrategy’s visibility and investment potential are set to rise. 

Therefore, this could be a breakthrough for the crypto sector. 

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