Institutional Adoption of Bitcoin via MicroStrategy: A Strategic Proxy for Central Banks and Long-Term Investors

The institutionalization of Bitcoin has reached a pivotal inflection point. Central banks, long cautious about digital assets, are now deploying sophisticated strategies to gain exposure to Bitcoin without directly holding the volatile cryptocurrency. At the forefront of this shift is MicroStrategy (MSTR), a company that has redefined itself as a corporate Bitcoin treasury. By analyzing the Swiss National Bank's (SNB) recent $38 million investment in MSTR and broader institutional trends, we uncover a compelling narrative: MSTR is not just a stock—it is a de-risked gateway to Bitcoin for institutions navigating regulatory and operational complexities.

Central Banks and the MSTR Proxy

The SNB's decision to increase its MSTR stake in 2025 is emblematic of a broader trend. By investing in a company that holds over 580,000 Bitcoin (2.7% of the total supply), the SNB gains indirect exposure to Bitcoin while sidestepping the custody, regulatory, and volatility challenges of direct ownership. This approach mirrors Norges Bank's strategy, which has acquired over 1.1 million MSTR shares. These moves signal that central banks are no longer merely observers in the crypto space—they are active participants, leveraging corporate vehicles to align with Bitcoin's growing legitimacy as a reserve asset.

The logic is straightforward: MSTR's business model is engineered to amplify Bitcoin's value. The company raises capital through equity and debt offerings (e.g., its 42/42 plan) and immediately converts proceeds into Bitcoin. This recursive strategy creates a leveraged exposure to Bitcoin, with each MSTR share effectively representing a fraction of the company's Bitcoin holdings. As of August 2025, MSTR's Bitcoin per share stands at 504 BTC, and its stock trades at a 112% premium to net asset value (NAV), reflecting investor confidence in its Bitcoin-centric thesis.

Why MSTR Outperforms as a Proxy

MSTR's performance metrics underscore its appeal. Over the past 12 months, MSTR has delivered a 139% return, outpacing Bitcoin's 53% gain and far exceeding traditional equities like Tesla (94%) and gold (40%). This outperformance is driven by MSTR's structural advantages:
- Leveraged Exposure: MSTR's beta to Bitcoin is 1.31–1.41, meaning it amplifies Bitcoin's gains during bull markets.
- Risk-Adjusted Returns: MSTR's Sharpe ratio (1.57) and Sortino ratio (2.84) exceed Bitcoin's (1.09 and 1.94, respectively), indicating superior efficiency in balancing risk and reward.
- Capital Efficiency: By issuing equity and debt at low interest rates, MSTR funds Bitcoin purchases without diluting its per-share value as aggressively as critics fear.

Critics argue that MSTR's reliance on capital raising introduces dilution risks. However, the company's ability to scale Bitcoin holdings faster than dilution—its BTC per share has grown despite share issuance—demonstrates a sustainable model. For instance, MSTR's 21/21 capital plan, which aims to raise $42 billion by 2027, has already funded the acquisition of 329,000 BTC in 2025 alone.

Broader Institutional Trends and Competition

Beyond central banks, institutional investors are flocking to MSTR as a Bitcoin proxy. JPMorgan estimates $50 billion is indirectly invested in MSTR through ETFs and mutual funds tracking major indices. This inflow is amplified by MSTR's inclusion in indices like the Market Vector Global Digital Assets Equity Index, where it accounts for 10% of the weighting.

While new entrants like Twenty One Capital (which holds 31,500 BTC) are emerging, MSTR's dominance remains unchallenged. Its scale, brand recognition, and track record of consistent Bitcoin accumulation give it a first-mover advantage. Moreover, MSTR's capital stack—comprising convertible bonds, preferred shares, and common equity—offers layered opportunities for investors seeking varying degrees of leverage and yield.

Investment Case: Aligning with Institutional Trends

For long-term investors, MSTR represents a strategic alignment with institutional Bitcoin adoption. Here's why:
1. Regulatory Navigation: MSTR's public equity structure provides a compliant pathway for institutions restricted from holding Bitcoin directly.
2. Convexity to BTC Price: As Bitcoin rises, MSTR's premium expands, creating a self-reinforcing cycle of capital raising and Bitcoin accumulation.
3. Diversification: MSTR's correlation with Bitcoin (Pearson coefficient of 0.8) is high, but its volatility (113%) offers amplified exposure without direct custody risks.

However, risks persist. A crypto bear market could strain MSTR's capital-raising capabilities, and regulatory scrutiny of leveraged structures may intensify. Investors must also weigh the dilution from ATM offerings and convertible debt against the potential for Bitcoin's long-term appreciation.

Conclusion

The Swiss National Bank's investment in MSTR is not an outlier—it is a harbinger of a broader institutional shift toward Bitcoin. By using MSTR as a proxy, central banks and institutional investors are effectively hedging against the limitations of direct crypto ownership while participating in Bitcoin's growth. For individual investors, this trend offers a clear signal: aligning with MSTR's Bitcoin thesis is not just speculative—it is a calculated bet on the institutionalization of digital assets.

As the line between traditional finance and crypto continues to blur, MSTR stands at the intersection of innovation and institutional credibility. For those seeking to capitalize on this convergence, the time to act is now.