Bitcoin-Proxy MicroStrategy Added to Key MSCI World Stock Index

(Bloomberg) — MicroStrategy Inc., known for amassing nearly $13 billion in Bitcoin, will be included in a major global stock index following a rally in the firm’s shares that outpaced the digital asset.

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MSCI Inc. The Tysons Corner, Virginia-based enterprise software maker is one of the three largest companies added to the MSCI World Index by market capitalization, it said Tuesday. Index providers review their indicators regularly, and the latest changes come into force at the end of the month.

The shift is an indication of how crypto risk may increasingly infiltrate traditional portfolios, given that billions of dollars are tracked or benchmarked against MSCI’s world benchmarks. Other such avenues include new US and Hong Kong exchange-traded funds that hold digital assets directly and may, over time, attract interest from products such as multi-asset funds.

Michael Saylor, co-founder of MicroStrategy, is a prominent Bitcoin advocate. In the midst of the Covid-19 crisis, he decided to invest some of the company’s money in the original cryptocurrency. The company had 214,400 Bitcoins as of April 26.

Shares of MicroStrategy have more than quadrupled in the past year, outpacing a nearly 130% rise in Bitcoin amid the cryptocurrency’s recovery from the 2022 rout. The company is seen as a proxy for exposure to the token, but that role has been called into question following the launch of US Bitcoin ETFs in January.

In March, Kerrisdale Capital Management LLC said it was shorting the stock as it outpaced the rise in the price of the digital asset. MicroStrategy has a buy rating from four analysts, with an average 12-month price target of $1,678.75, according to data compiled by Bloomberg; That’s almost 30% above the stock’s current level.

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