MicroStrategy Incorporated (MSTR) has outperformed all of its S&P 500 competitors. Thanks to its investment strategy with Bitcoin (BTC).
The co-founder and executive chairman of the company, Michael Saylor, made this known during an interview with CNBC.
During the interview, Saylor attributed MicroStrategy’s success to its Bitcoin-focused strategy, which has helped the company outpace the broader market significantly since its inception in 2020.
According to Saylor, his company’s investments in Bitcoin have yielded an annual return of 44% on average since August 2020, while the S&P 500 only generated a 12% yearly return.
MicroStrategy’s Bitcoin-focused Strategy Outperformed All S&P 500 Company
In a recent interview with CNBC on its Squawk Box program, Michael Saylor revealed how MicroStrategy has turned conventional wisdom in finance to its advantage.
He firmly stated that MicroStrategy was able to outperform all other S&P 500 firms due to the Bitcoin strategy it adopted as far back as August 2020.
Saylor mentioned that his company began buying and stockpiling Bitcoin for a total amount of $8.3B in August 2020. Since then, the price of Bitcoin has gone up by almost 44% every year compared to the more traditional S&P500 index, which only grows by 12% every year.Â
To this, Saylor declared MicroStrategy the most successful firm in the S&P500, with an 825% increase in its stock price, even outperforming Nvidia.
The executive chairman noted that the firm’s impressive performance did not come by chance. Instead, it is a result of MicroStrategy’s Bitcoin-centric strategy, which believes that Bitcoin is a better store of value than traditional assets.Â
He added that the firm’s massive investment in Bitcoin is never a mere speculative bet but part of MicroStrategy’s long-term vision as the firm believes that Bitcoin is a “smart, fast, strong money” that offers flexibility and liquidity in uncertain times.
Last month, it was reported that MicroStrategy holds 226,500 BTC, making the firm the largest corporate holder of Bitcoin. The firm’s Bitcoin holdings were worth $14.7B.
Another Step Into Bitcoin-backed Convertible Bonds
MicroStrategy is not stopping at just buying and accumulating Bitcoin; the firm has shown interest in diversifying into Bitcoin-backed convertible bonds, which offer 1% interest and premium returns.
The diversification will not only act as another funding source for the firm but will also enable more conservative investors to gain exposure to Bitcoin and benefit from it without experiencing its direct volatility.
While MicroStrategy will continue with its software and business intelligence services, this will primarily be used as a liquidity source to strengthen its Bitcoin holdings. This massive diversification gives MicroStrategy an edge in the financial market.
It is undeniable that MicroStrategy has recorded more success with its Bitcoin-focused approach. However, this approach is also risky, especially when considering the volatile nature of Bitcoin and the increased regulation of cryptocurrency markets.
