MicroStrategy Inc (NASDAQ: MSTR) is in focus today after the Norwegian central bank revealed it holds a sizable stake in the business intelligence company turned Bitcoin proxy.
In total, the Norwegian Central Bank Fund owns about $500 million of MSTR shares, according to its 13-F filing on Thursday.
It is now one of the largest institutional investors in the company.
The Norges Bank revelation is sending MicroStrategy stock up in premarket today.
Significance of Norges Bank’s announcement
MicroStrategy remains popular among investors as it continues to invest rather aggressively in Bitcoin. In total, the company now owns a whopping 471,107 BTCs.
The strategy has paid off exceptionally well, with MSTR share price currently up some 7 times versus the start of 2024.
Norges Bank’s investment in MicroStrategy underscores its broader strategy to diversify its portfolio and see higher returns for the Government Pension Fund of Norway.
It also reflects the central bank’s confidence in the long-term potential of the company and its innovative approach of integrating Bitcoin into its business model.
MicroStrategy stock does not currently pay a dividend, though.
Banks are turning to cryptocurrencies
Norges Bank’s announcement also highlights growing interest of central banks and institutional investors in cryptocurrencies and the blockchain technology at large.
Just last week, Bank of America chief executive Brian Moynihan said the Wall Street banks will quickly embrace cryptocurrencies if regulators allowed.
In fact, it’s already working with Ripple on lower-cost, high secure and efficient cross-border transactions.
Investors should also know that the Norges Bank Investment Management is not alone in turning to the Bitcoin proxy for diversification.
The Swiss National Bank currently owns a little under half-a-million shares of MicroStrategy Inc as well.
Nonetheless, while MicroStrategy stock is up significantly in the trailing 12 months, it’s still down more than 25% versus its high in late November at writing.
Should you buy MicroStrategy stock today?
The global central banks turning to MicroStrategy shares may also indicate a wider acceptance and overall demand for Bitcoin.
With MSTR’s continued focus on Bitcoin and its innovative business mode, it’s positioned to remain a key player in the evolving digital asset market.
That’s also what could help its share price push further up through the remainder of this year, according to Mizuho analyst Dan Dolev.
Dolev assumed coverage of MicroStrategy stock this week with a “buy” rating.
His $515 price target indicates potential for a more than 50% upside from current levels.
Anticipation that MSTR will continue buying Bitcoin, coupled with expectations of Bitcoin price appreciation, grants MicroStrategy a premium to the underlying value of its Bitcoin holdings.
Bitcoin price sits comfortably above the $105,000 level at writing.
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