There is something attracting attention in the Bitcoin market that many people may not have noticed: instead of buying BTC directly, veteran investors are looking at MicroStrategy (MSTR). So what is MSTR and why is it more attractive than Bitcoin? The answer lies in an interesting debate that Adam Back, CEO of Blockstream, recently shared on X.

MicroStrategy is a software company owned by Michael Saylor, a well-known figure in the Bitcoin community for his maximalist stance on BTC. But what makes it special is: this company has become one of the largest Bitcoin investors in the world. According to Saylor’s latest update, MicroStrategy holds at least 189,150 BTC, worth about $8.09 billion. If you’re not clear on what MSTR is, think of it as an indirect way to gain exposure to Bitcoin through a company with underlying assets.

Adam Back made an interesting observation: MSTR is trading at a significant discount compared to the value of the BTC the company owns. He estimates the core software business value of MicroStrategy at around $2 billion. Plus the $8.09 billion from Bitcoin holdings, Back calculates that the fair market value should be around $10.5 billion to $11.5 billion. That means MSTR’s stock price should be in the range of $625–$685 to reflect its true value.

Something interesting happened at the end of 2023. MSTR rose from $329 to $685, far outpacing Bitcoin’s growth during the same period. Both assets were driven by excitement around the launch of spot Bitcoin ETF funds in the US. But after these ETFs actually launched last week, both faced selling pressure.

That’s when things got interesting. MSTR dropped to $482 on January 16, a 30% decline from its yearly high. Other crypto stocks also experienced similar downward pressure: Coinbase fell 15%, Cleanspark dropped 33%. The company was largely used as a proxy for Bitcoin ETF exposure until the ETFs actually appeared.

But what’s the issue? Some point out that MicroStrategy has $2 billion in debt to consider. Back admits this but argues that this debt has existed for a long time and will “increase” over time. Analyst Fred Krueger calculated that even if Bitcoin reaches $200,000, MSTR would still perform slightly worse than BTC. He also mentioned BlackRock’s IBIT with 1.3x leverage, showing there are many other options out there.

Overall, MicroStrategy has increased its Bitcoin holdings by 36.11% according to recent calculations. So what is MSTR from an investment perspective? It’s a way to gain exposure to Bitcoin through a software company, but whether it’s the best choice or not remains an open question depending on your strategy.