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Strategy (NASDAQ:MSTR) Seen as Attractive Bitcoin Proxy for Investors

Analysts highlight Strategy's levered exposure to Bitcoin and potential upside amid favorable market conditions.
Published on 2025-02-07

Strategy (NASDAQ:MSTR) Seen as Attractive Bitcoin Proxy for Investors

Analysts at Keefe, Bruyette and Woods have initiated coverage of Strategy (NASDAQ:MSTR) with an "outperform" rating, calling it an "attractive proxy" for investors seeking exposure to Bitcoin. The firm provides "levered exposure" to the cryptocurrency, combined with additional upside from accretive Bitcoin purchases and a valuation exceeding net asset value.

Potential Benefits and Growth Drivers

Strategy's management is exploring innovative financial strategies to expand its Bitcoin treasury and engineer digital asset-related securities for a broad range of investors. The company is also climbing the ranks for potential inclusion in the S&P 500, having already secured a spot in the Nasdaq 100 index. A more favorable regulatory environment under the new U.S. administration could further boost its prospects.

Financial Performance and Market Position

Despite posting a fourth straight quarterly loss and a $1.01 billion impairment charge on digital assets, Strategy remains a leading beneficiary of Bitcoin's growth. Since beginning its Bitcoin purchases in 2020, the company has seen its shares surge by over 540% in the past year.

Investment Thesis

Analysts believe Strategy is well-positioned for further upside if Bitcoin adoption accelerates. The stock offers a directional play on Bitcoin's spot price and underlying volatility, appealing to both equity and fixed income investors.

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