From Nasdaq: 2024-03-28 07:50:00

Bitcoin’s price surge has fueled MicroStrategy’s rise to over 200% year to date, with the company owning over 1% of all Bitcoins in existence. However, with new spot Bitcoin ETFs, investors may shift away from proxy stocks like MicroStrategy, causing potential valuation concerns.

MicroStrategy’s stock market valuation now trades at a premium to its crypto holdings, indicating investors’ high expectations for Bitcoin’s price. The company’s aggressive debt-fueled Bitcoin purchasing strategy may pose risks, as investors now have access to real Bitcoin ETFs, potentially eroding MicroStrategy’s appeal.

Consider carefully before investing in MicroStrategy, as it was not among the 10 best stocks identified by the Motley Fool Stock Advisor analyst team. With potential overvaluation and risks associated with its Bitcoin-heavy strategy, investors may find better opportunities elsewhere for potentially higher returns.

Dominic Basulto holds Bitcoin positions, and the Motley Fool recommends and has positions in Bitcoin. The author’s opinions are independent of Nasdaq, Inc., and readers should consider individual preferences before investing.

Read more at Nasdaq MarketSite: This Company Owns 1% of All Bitcoin, but Is It Still a Buy?