MicroStrategy, Inc (MSTR), the enterprise business intelligence software firm founded by Michael Saylor, is making a huge bet on Bitcoin this week.
The company announced on Monday that it had completed the sale of $500 million in bonds, with the goal of using the estimated $488 million in proceeds to buy Bitcoin. That same day, the firm announced plans to sell up to $1 billion in stock in order to acquire even more.
Prior to this week, MicroStrategy held 92,079 Bitcoins, equivalent to over $3.56 billion dollars, at time of writing. The Bitcoin is being held by MacroStrategy LLC, a newly formed subsidiary.
Bitcoin acquisition has become something of a second mandate for MicroStrategy, after its primary company interest in software development.
Accessing Bitcoin Via MicroStrategy – And ETFs
While a Bitcoin ETF is still in the works, investors can still access crypto assets indirectly via holding ETFs that hold MicroStrategy.
The stock appears in the portfolios of a diverse range of ETFs.
Below are the top five ETFs with the highest portfolio exposure to the stock:
Source: ETFdb.com. Data as of June 16, 2021
BITQ tracks the Bitwise Crypto Innovators 30 Index and focuses primarily on pure play crypto companies providing a “picks and shovels” approach to crypto investing. It has 31 total holdings with MicroStrategy as its largest with 11.21% of its total assets.
BITQ has an expense ratio of 0.85%
Meanwhile, DAPP tracks the MVIS Global Digital Assets Equity Index, which is composed of diversified all-cap companies that derive at least half of their revenue from digital assets. The fund has 27 total holdings, of which MicroStrategy has a 4.87% holding. DAPP has an expense ratio of 0.65%.
MicroStrategy also appears in the market’s largest blockchain ETF. The Amplify Transformational Data Sharing ETF (BLOK) invests at least 80% of its assets in companies involved in the development and utilization of blockchain technology. BLOK is actively managed and has 47 holdings, with MicroStrategy being its largest, holding 5.73% of its total assets.
BLOK has an expense ratio of 0.70%.
Finally, there are two small cap ETFs that have substantial allocations to MicroStrategy, as MicroStrategy is a still a small cap stock.
The Invesco S&P SmallCap Momentum ETF (XSMO) and the Invesco S&P SmallCap Information Technology ETF (PSCT) hold MicroStrategy in their portfolios in weights of 3.44% and 3.38%, respectively.
PSCT tracks the S&P SmallCap 600Ⓡ Capped Information Technology Index, which tracks small U.S. companies in the information technology sector and is a subset of the S&P SmallCap 600Ⓡ Index. PSCT has an expense ratio of 0.29%.
Meanwhile, XSMO tracks the S&P Smallcap 600 Momentum Index, which holds the 120 securities with the highest momentum scores within the S&P SmallCap 600Ⓡ Index. XSMO has an expense ratio of 0.39%.
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