With the hype surrounding Bitcoin exchange-traded funds, many investors are drawn to the potential of these financial instruments.
However, some analysts suggest there might be a better alternative: MicroStrategy (MSTR) stock. While Bitcoin ETFs offer direct exposure to Bitcoin’s price, MicroStrategy’s unique strategy has consistently outperformed traditional ETF investments, making it a strong contender for those seeking long-term growth.
MSTR Outshines Bitcoin ETFs
MicroStrategy, led by executive chairman Michael Saylor, has been on an aggressive Bitcoin accumulation strategy since 2020. The company has invested over $8.3 billion in Bitcoin, with impressive results.
“Since August 2020, Bitcoin is up 44% per year, while the S&P 500 has grown just 12%. MicroStrategy’s stock has surged by 825%, surpassing even Nvidia, which rose 821%,” Saylor mentioned in an interview.
This performance illustrates the potential of MicroStrategy’s Bitcoin-backed investment approach. Indeed, what sets MicroStrategy apart is its ability to leverage Bitcoin through convertible bonds, offering investors the opportunity to gain exposure to Bitcoin without directly purchasing it.
“We pioneered the Bitcoin-backed bond market, issuing convertible bonds backed by 5x more Bitcoin collateral,” Saylor explained.
This strategy allows the company to generate significant returns while managing Bitcoin’s inherent volatility. In contrast, Bitcoin ETFs provide one-to-one performance tracking with the cryptocurrency but without the potential for leveraging returns.
“With a Bitcoin ETF, you’re getting one-for-one performance and paying a 25 basis point fee, with no yield,” Saylor noted.
Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach
MicroStrategy’s approach, on the other hand, enables investors to capture both upfront and long-term yields through its bond and equity strategies.
With growing concerns about Bitcoin ETF outflows—over $1.2 billion in recent weeks—investors may want to explore alternative ways to gain exposure to Bitcoin’s growth. MicroStrategy’s approach provides the potential for higher returns, making it a compelling option for those looking beyond ETFs.
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