MicroStrategy presents itself as an alternative to spot Bitcoin ETFs.

By Anjali Kochhar

The software company MicroStrategy (MSTR), whose executive chairman is Bitcoin maximalist Michael Saylor, posted lower-than-expected fourth-quarter earnings on Tuesday.

According to the statement shared by company MicroStrategy, self-styled as “the world’s first Bitcoin development company,” outlined its commitment to advancing the Bitcoin network through financial market activities, advocacy efforts, and technology innovation in presentation slides.

Established in 1989, MicroStrategy initially operated as a software consulting firm until mid-2020. However, the company underwent a significant transformation when its CEO, Michael Saylor, initiated a strategic shift, reallocating the firm’s treasury assets from cash to Bitcoin. Presently, MSTR stands as the foremost publicly traded holder of Bitcoin, boasting a substantial portfolio of over 190,000 Bitcoins valued at more than $8 billion.

MicroStrategy’s shares have declined 22% year to date since the introduction of the spot Bitcoin ETF products.

In response to the question of whether investors looking to allocate to Bitcoin would be selecting to purchase the ETFs over MSTR, the company tried to position itself as the better option during its earnings presentation.

One of the justifications made was that, in contrast to ETFs, which only hold cryptocurrency assets, investors in MSTR have active control over the capital structure and the company can innovate value. Other elements mentioned by MSTR included the variation in management fees and MicroStrategy’s capacity to produce cash and access capital markets for alluring loan arrangements.

According to TD Cowen analyst Lance Vitanza, MicroStrategy shares still present investors seeking Bitcoin exposure with several key advantages compared to spot Exchange Traded Products (ETPs). In his note on Tuesday, Vitanza stated, “Even with spot Bitcoin ETPs emerging as potential alternatives, we believe a considerable premium on Bitcoin will remain justified.”

About the author

Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.

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