The ongoing cryptocurrency rally has been remarkably robust, propelling a software maker, often regarded as a Bitcoin hedge fund, to achieve a stock market capitalization surpassing that of nearly half of the companies listed in the S&P 500 Index.
MicroStrategy Inc., led by billionaire Michael Saylor, operates as an enterprise software provider heavily invested in Bitcoin.
Its shares have surged by 204% since the beginning of the year, climbing from $632 at the close of 2023 to $1,919 as of Wednesday’s market close, coinciding with Bitcoin’s proximity to its all-time high.
To put this into context, Nvidia Corp., a notable market leader and investor favorite, has seen an 82% increase in its stock value in 2024.
This places it ahead of 237 companies within the 503-member S&P 100 as of Wednesday’s close, including well-established entities like eBay Inc. and Delta Air Lines Inc.
Currently, MicroStrategy is a constituent of the Russell 2000 Index, which comprises companies with an average market capitalization of $1 billion.
It holds the position of the second-largest stock in the small-cap index, trailing behind Super Micro Computer Inc., whose $60 billion market capitalization facilitated its inclusion in the S&P 500 earlier this month.
However, the significance of size may be debatable in this context.
In an investment landscape increasingly dominated by passive strategies, inclusion in the primary equities benchmark can significantly impact a stock’s price as investors seek exposure through S&P 500 index funds.
Describing MicroStrategy as “essentially a leveraged holding company for Bitcoin,” Steve Sosnick, chief strategist at Interactive Brokers, highlights the unique structural aspect of the company.
He notes that MicroStrategy’s revenue and earnings generation do not align with the consistent patterns required by SPX listing criteria.
