MicroStrategy’s Stellar 2024 Performance Outshines Other Traditional Finance Entities Linked to Crypto
Despite enduring a challenging December, MicroStrategy (MSTR), the software company that has evolved into a prominent bitcoin (BTC) holder, has had a remarkable year. The company’s stock has taken a hit, falling nearly 50% since November, when it entered the Nasdaq 100 index and saw a massive 600% rise in value. However, even after this drop, MicroStrategy has secured a remarkable 342% return in 2024, making it the top performer among major crypto-linked assets in traditional finance (TradFi).
2024 has been a year of volatility, driven by geopolitical tensions and significant technological advances that have rocked financial markets. Ongoing conflicts in Eastern Europe and the Middle East, elections worldwide, the unwinding of the yen carry trade in August, and the rapid rise of artificial intelligence (AI) have all contributed to market fluctuations.
MicroStrategy’s return outpaces even Nvidia (NVDA), the chipmaker that benefited from producing AI-specific integrated circuits, achieving an impressive 185% return — the highest among the tech giants known as the “magnificent seven.” Meta Platforms (META) followed with a 71% gain. Bitcoin itself has seen a 100% increase, fueled by the approval of spot exchange-traded funds (ETFs) in the U.S. in January and multiple record-breaking price surges throughout the year. Bitcoin has surpassed its rivals, ether (ETH), which rose 42%, and Solana (SOL), up 79%.
Among Bitcoin-related ETFs, the iShares Bitcoin Trust (IBIT) posted a return of over 100% and became the fastest ETF ever to reach $50 billion in assets.
While Bitcoin miners largely underperformed, there were notable exceptions. The Valkyrie Bitcoin Miners ETF (WGMI), which tracks mining stocks, saw a modest 30% rise. Despite increased demand for mining power and high-performance computing (HPC) capabilities from AI companies, the sector’s growth was subdued. However, individual mining companies such as Bitdeer (BTDR) and WULF (WULF) posted impressive gains of 151% and 131%, respectively.
Even with the broader sector’s tepid performance, miners outperformed traditional equities. The tech-heavy Nasdaq 100 Index (NDX) increased by 28%, while the S&P 500 Index (SPX) rose 25%. Gold also surpassed the S&P 500, gaining 27% and outperforming the broader equity market for the third time in the last five years.
Amid concerns about U.S. inflation and the budget deficit, the yield on the 10-year Treasury note climbed 15%, reaching 4.5%. Interestingly, yields rose by a full 100 basis points since the Federal Reserve began reducing interest rates in September.
The iShares 20+ Year Treasury Bond ETF (TLT), which tracks bond prices, lost 10% this year, marking a 40% decline over the past five years.
On a brighter note, the U.S. dollar (measured by the DXY Index against a basket of currencies from major trading partners) strengthened, reaching its highest point since September 2022.
As for oil, West Texas Intermediate (USOIL) ended the year nearly flat, with a slight increase of less than 1%, hovering around $71 a barrel. The price fluctuated significantly over the year, briefly reaching nearly $90.
Looking ahead to 2025, the focus will shift to key events such as the U.S. debt ceiling debate, the policies of President-elect Donald Trump, and whether the U.S. can maintain its impressive economic growth trajectory.
