Is MicroStrategy (MSTR) a better investment than Bitcoin? Expert debate

Crypto industry veterans and investors are debating whether Bitcoin (BTC) or MicroStrategy (MSTR) is the better buy following several weeks of stellar performance for both assets.

Since the start of the year, Bitcoin has surged 54% on the back of strong demand for newly launched Bitcoin ETFs. However, Microstrategy – the company owned by Bitcoin billionaire Michael Saylor – increased 155% during the same period.

Comparing Bitcoin with Microstrategy

MicroStrategy is the largest corporate owner of Bitcoin in the world. The asset today holds 205,000 BTC – 1% of the company's balance sheet.

Many, including Saylor, liken the company to a Bitcoin spot ETF with the advantage of no management fees. However, its supporters note several other advantages – namely the ability to deploy cheap and long-term debt to collect more BTC.

“Every time MSTR makes buying power on cheap financing, its value increases, so it's already doing as long as BTC,” Bitcoin analyst Willy Wu explained in an X post on Thursday. These purchases effectively increase shareholders' “BTC per share,” a measure that remains flat in standard Bitcoin ETFs led by BlackRock and Grayscale.

This type of debt is much cheaper than what normal people can access.

While the Federal Reserve's benchmark rate is currently above 5% and crypto markets are lending stablecoins above 10%, MicroStrategy's latest convertible note sale offers only 0.6% and 0.8% interest rates. The debt on both loans — totaling $1.2 billion — is not due until 2030.

Bitcoin OG Adam Back MSTR has other methods to get more BTC, including selling bonds, or selling more company shares. The latter method is effective in reducing the company's debt ratio, and has even proven to increase shareholders' BTC per share.

“Between now and hyperbitcoinization, can you hold BTC and double it more? I think the answer is yes, maybe,” he wrote.

The benefits of real Bitcoin

Like any company, microstrategy still carries a corporate risk next to actual Bitcoin, as management chooses to change directions on its Bitcoin strategy. A portion of the valuation is based on past software business, which is not guaranteed to be profitable in the future.

Since the beginning of the year, Saylor has been selling his stake in MSTR to buy more BTC, which critics see as a lack of guilt in his own company compared to Bitcoin itself.

“If Saylor thought MSTR was a good investment, he would have bought shares instead of selling them to buy more bitcoins,” the pleader wrote on Friday.