Jim Cramer, the well-known CNBC host and financial personality, has issued a cautionary statement urging investors not to buy shares of business intelligence firm MicroStrategy. Cramer, famous for his bold market predictions, suggested that those seeking exposure to Bitcoin should consider purchasing the cryptocurrency directly rather than through MicroStrategy’s stock.
Don’t Buy MicroStrategy’s
On Monday’s episode of Mad Money, renowned CNBC host Jim Cramer, known for his outspoken views on finance and cryptocurrencies, advised against purchasing MicroStrategy (MSTR) stock. Cramer further advises investors to consider buying the bitcoin directly, rather than investing in companies like MicroStrategy.
Cramer’s cautionary remarks were prompted by significant price fluctuations in Bitcoin, which surged above $74,000 before retracing to $58,000.
Despite this volatility, MicroStrategy has notably outperformed Bitcoin on a year-to-date basis, catching the attention of investors and analysts alike.
MicroStrategy’s Bullish Case
Recently, investment banking firm TD Cowen predicted significant growth for MicroStrategy this year, fueled by institutions entering Bitcoin exchange-traded funds (ETFs). Meanwhile, TD Cowen believes that institutions’ entry into Bitcoin ETFs could serve as a significant bullish catalyst for MicroStrategy.
Apart from this, MicroStrategy is expected to benefit from the potential rejection of Ethereum-based spot ETFs later this month. Moreover, Michael Saylor is confident that Bitcoin ETFs won’t threaten MicroStrategy, highlighting the company’s value of providing “intelligent leverage” without ETF fees.
Previous Financial Performance
In its most recent quarterly report, MicroStrategy disclosed a net loss of $53.1 million. Notably, the gains related to Bitcoin held by MicroStrategy were not included in this report, as the company has yet to adopt the new accounting rule for reporting digital currencies on its balance sheet.
On the other hand Brokerage firm Benchmark recently hinted that MicroStrategy could be included in the S&P 500 index if it were to adopt the new accounting standard.
This new standard, established by the Financial Accounting Standards Board (FASB), allows companies to report digital currencies at fair value, beginning in 2025.
Bitcoin Price Analysis
Although, MicroStrategy’s fortunes have been closely tied to the cryptocurrency market, particularly the Bitcoin bull run. With Bitcoin’s price currently hovering around $62,000, showing a 1% increase in the last 24 hours, trading volume has surged by 57% to $28.7 billion.
