Strategy’s Stock Surges 540% as Institutions Double Down on Bitcoin Exposure

• BlackRock boosts its stake in Strategy to 5%, reinforcing institutional confidence in Bitcoin-focused investments.
• Strategy’s stock outperformed Bitcoin with 540% gains, attracting major institutional investors despite high volatility.
• BlackRock expands its Bitcoin exposure via Strategy and IBIT, signaling growing mainstream adoption of digital assets.

According to SEC filing, BlackRock has increased its stake in Strategy (previously MicroStrategy) to 5%. 11.2 million shares of the Bitcoin-focused company are currently owned by the company. BlackRock raised its ownership from 4.09% at the end of September 2024 to 0.91% last quarter. This action demonstrates the increasing institutional trust in Strategy as a stand-in investment for Bitcoin.

Institutional Adoption Fuels Strategy’s Market Performance

The firm shares were ahead of Bitcoin over the past year, with 540% gains compared to Bitcoin’s triple-digit returns. Institutional interest in Strategy’s stock is still very high. Vanguard Group holds 7.75% of Strategy shares, while Capital Research and Management owns 7.78%. Eaton Vance Management and Susquehanna Financial also hold significant positions.

Moreover, Strategy remains a heavily shorted stock, with short interest rising 5.25% last month to 24.47 million shares. Despite high volatility, institutional investors have a positive outlook towards the long-term Bitcoin strategy of the company. This brings interest from Investors seeking quick stock price swings due to high-return, high-risk trading.

BlackRock’s Expanding Bitcoin Exposure

In addition, BlackRock initiated its Bitcoin fund, iShares Bitcoin Trust, or IBIT. BlackRock’s new, regulated Bitcoin ETF received over $40 billion in net inflows during its first two months in January 2024.

Thus, BlackRock’s increasing exposure to Bitcoin suggests wider institutional acceptance of digital assets. The duality of the asset manager’s approach to the market testament to its bullish outlook on the cryptocurrency market including direct Bitcoin investment through IBIT and indirect exposure via Strategy.

Furthermore, Strategy recently rebranded and introduced its convertible preferred stock, Strike (STRK). The stock debuted on the Nasdaq, closing 2% higher with 650,000 shares traded. STRK continued its momentum, gaining another 5% in pre-market trading. The rebranding aligns with the firm’s Bitcoin-focused vision, positioning it as a major institutional gateway to crypto investments.

However, despite institutional backing, Strategy’s stock has faced recent declines. MSTR dropped 3.3% before Wall Street’s opening bell on Friday and is down 4.1% over the past five trading days. Even so, BlackRock’s increased stake reinforces the company’s role in bridging traditional finance and Bitcoin investments. As institutional interest grows, Strategy remains a key player in Bitcoin’s mainstream adoption.