Tom Nash
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Tom's Top Stock Picks 2025 [January 3, 2025]
🕑 Added 2025-01-03 18:10:12 +0000 UTCIn the attached file you will find a my new and updated Top Stocks List.
As part of the new list, we have added 1 stock, MicroStrategy Inc (MSTR) to our Top Stocks Picks and I'd like to explain the rationale behind that decision.
The current share price of MicroStrategy as of this post is 327.44 USD.
You see, in the wonderful world of finance right, everyone and their grandma is blabbing about Bitcoin, which makes me nervous short term, but I simply can't ignore the long term potential on Bitcoin and MicroStrategy.
MicroStrategy (MSTR) and Saylor took a big, bold swan dive into the Bitcoin pool a long time ago, and even when they were hated on, that conviction never broke.
MSTR is arguably the biggest “publicly traded proxy” for Bitcoin exposure. That’s because they own an absolutely mind boggling amount of BTC. Michael Saylor, the company’s co-founder and ex-CEO (but still Chairman), basically bet the future of the company on Bitcoin.
Some call him a visionary. Others call him nuts. But as your friendly cynic, I prefer to say: maybe a bit of both.
In this article I’m going to dissect why MSTR might just be one of the smartest long term Bitcoin bets you can make. But I’m also going to talk about all the ways it could blow up in your face, because, let’s be real, I’m not your personal finance guru who only sees sunshine and rainbows.
I know how quickly euphoria can flip into panic in these markets. So, whether you’re a raging Bitcoin bull or a skeptic, strap in. We’re about to explore the potential (and the pitfalls) of MSTR.
Before we deep dive into MSTR’s peculiar love affair with Bitcoin, let’s talk about why BTC still matters. If you’re reading this, maybe you’re a Bitcoiner. Or maybe you’re on the fence and you want a cynic’s breakdown.
Bitcoin’s supply is capped at 21 million coins. That’s it. No Federal Reserve can waltz in and decide to print another trillion BTC. In a world where central banks have printing presses that might as well be squeaking 24/7, that scarcity argument has some appeal. Is it a perfect hedge against inflation?
Debatable. But it has at least a narrative that resonates with a lot of folks who are tired of endless fiat expansion.
No single entity controls Bitcoin. Sure, the distribution might not be perfectly even, and big mining pools do exist, but there’s no CEO of Bitcoin to come out at press conferences. No shady central committee flipping the monetary policy on a whim. It’s arguably the “purest” major crypto in terms of decentralization, at least relative to some other coins that have popped up like daisies in spring.
We love comparing Bitcoin to gold because it’s fun, but also because there’s a kernel of truth. Gold has been considered a store of value for thousands of years. Bitcoin tries to do the same, but in digital form. The track record is nowhere near as long, but the world is going digital. The question is: does that automatically mean Bitcoin becomes “the new gold”?
Some argue yes. Others say it’s a glorified Ponzi. Welcome to the debate.
We can’t ignore that BTC trades like a roller coaster. It soared to $60k+, crashed to half that, soared again, got hammered by negative press, bounced, dipped, soared, etc. If you’re faint of heart, you probably already ran for the hills. But if you have conviction, then you’re aware that the price could keep gyrating, but you’re in it for the long haul. And that’s the point: long haul.
MicroStrategy, founded in 1989, was originally a software company specializing in business intelligence, analytics, and basically the kind of stuff CFOs and data wonks love. For years, it quietly hummed along, not exactly the darling of Wall Street, but certainly not a penny stock either. It had its own ups and downs (including a nasty accounting scandal in 2000), but it survived, and co-founder Michael Saylor remained the face of the firm.
Then came 2020, the year that was basically a Michael Bay movie, minus the giant robots. The world changed drastically. Central banks went into overdrive, printing money as if it were going out of style.
MSTR’s leadership decided that holding dollars on the balance sheet was a losing proposition if inflation kicked in. So they took a radical step: they started converting corporate reserves into Bitcoin. More and more. And more.
Fast forward to the present, and MSTR owns well north of 100,000 BTC (the exact number changes, but it’s huge). That’s billions of dollars tied up in a digital asset that only existed for about a decade. Talk about going from mild-mannered software firm to high stakes gambler overnight.
It’s impossible to discuss MSTR’s pivot into Bitcoin without mentioning Michael Saylor.
Saylor’s become something of a crypto rock star. He does interviews left and right, proclaiming Bitcoin as the future, urging companies to hold it on their balance sheets, and basically painting BTC as a solution to every economic woe. Love him or hate him, you can’t deny his commitment. He’s so convinced about Bitcoin’s future that he leveraged MSTR’s balance sheet, taking on debt, sometimes convertible notes, sometimes bonds, to buy even more BTC. It’s like doubling and tripling down at the casino while telling everyone else they’re foolish for not joining in.
This approach might look brilliant if Bitcoin goes to $500k. It might look catastrophically stupid if BTC tanks below $10k and never recovers. Saylor’s either going to be remembered as the corporate visionary of our era or the guy who destroyed a perfectly good analytics firm chasing digital utopia. Or maybe somewhere in between.
Most people who want BTC exposure simply buy BTC. That’s the obvious route.
But some folks might have constraints, maybe they’re in a retirement account that doesn’t allow direct crypto purchases, or they prefer regulated equities. MSTR offers a sneaky alternative: buy shares of a company that holds a ton of BTC. If BTC’s price skyrockets, MSTR’s share price tends to move in tandem, often with even more leverage to the upside. If you want a chart based example, compare MSTR’s stock movements with BTC’s price. They’re highly correlated.
Wall Street suits might not be able to hold crypto directly in their funds if their mandates or the regulations around them are strict. But they can hold publicly traded stocks. Enter MSTR. It essentially serves as an ETF like vehicle for Bitcoin exposure.
That’s an oversimplification, but you get the idea. MSTR’s pivot made it one of the earliest large-cap equities to offer such a massive chunk of Bitcoin on its balance sheet. If big players want a piece of Bitcoin’s upside but can’t buy BTC directly, MSTR is one of the few “respectable” ways in, especially before a U.S. spot Bitcoin ETF comes around (which might be soon, or might be never, depending on the SEC’s mood).
We can’t forget that MSTR isn’t just a digital piggy bank. They still run an actual software business. True, the main story is their Bitcoin holdings, but the software side does generate revenue, fosters client relationships, and means MSTR is more than “just BTC.” If crypto somehow crashes for a period, MSTR still has something to fall back on. And if that software business grows (though overshadowed by the BTC storyline), you get the potential for a double whammy of value creation.
Saylor might be flamboyant, but he’s no dummy.
He’s an MIT grad who’s been leading tech endeavors for decades. He might come across like a zealot on the Bitcoin front, but he does seem to have done his homework. He’s basically read the entire crypto library and has become a brand ambassador for BTC. Having a fearless leader who’s “all in” can be advantageous if you align with his vision. It means they’re not going to bail at the first sign of trouble. They’re not doing a half measure. They’re forging ahead, for better or for worse.
Let’s not sugarcoat it: MSTR’s correlation with BTC is more volatile than a typical stock, and that can go both ways. But if you’re a long-term bull who believes BTC will eventually march its way past six figures and beyond, then MSTR could yield an amplified upside. In bull runs, MSTR has historically soared far faster in percentage terms than BTC itself. If you’re seeking bigger potential gains (with bigger potential risks), MSTR might scratch that itch.
Look at how many institutions have at least dipped a toe into Bitcoin. Tesla, Square (Block), PayPal, big banks experimenting with crypto custody. Then there’s the entire phenomenon of Bitcoin ATMs, lightning network improvements, and global acceptance. El Salvador even made Bitcoin legal tender (some say it’s a stunt, others say it’s revolutionary). The point is that adoption is growing, albeit in fits and starts. Over the long term, more adoption typically means higher demand, which can push up the price, especially given BTC’s limited supply.
Remember when Bitcoin was the Wild West?
Suddenly, the sheriff is in town. Some purists hate regulation, but mainstream investors love it because it reduces that sense of “Is this a scam or the future?” As more frameworks get established, big money can move in with more confidence. We’re already seeing the talk about a BTC spot ETF hitting the U.S. markets soon, which would further legitimize it. That can be a positive tailwind for Bitcoin’s price over time.
There’s debate on whether Bitcoin is truly an inflation hedge.
Some say it is, others say it’s not. My take? In the short term, it sure doesn’t act like it. In the long term, maybe. Because the supply is fixed, if global liquidity keeps expanding, in theory, more fiat would chase finite BTC. That’s the rationale. Real-world data is messy, but if you zoom out for a decade, Bitcoin’s track record dwarfs inflation by leaps and bounds. Will that continue?
Possibly. That’s your bet.
Bitcoin has corrected hard before, plummeting 80% from its highs multiple times in its short history. If it does so again and somehow fails to recover (maybe because some new technology dethrones it, or governments coordinate a massive crackdown, or Tether collapses, or the world decides it’s “over it”), MSTR’s balance sheet would be gutted. Their loan covenants and convertible debt revolve around the idea that Bitcoin will not remain in the gutter. If it does, or if it just stagnates at, say, $8k for a decade, MSTR’s finances could become dire.
They could theoretically be forced to issue more shares or sell Bitcoin at a massive loss just to cover obligations. Not a pretty picture.
We talk a lot about regulation bringing legitimacy. But what if the pendulum swings the other way? Suppose a major government decides Bitcoin is an existential threat to its currency system and basically outlaws institutions from holding or transacting in it. Could that kill Bitcoin? Possibly not entirely, but it could hamper adoption enough to keep BTC in the shadows.
That uncertainty alone might scare investors away from MSTR. Sure, MSTR’s home base is the U.S., where a ban is unlikely. But “unlikely” doesn’t mean impossible. If the climate shifts drastically, it’s game over for MSTR’s high octane crypto strategy.
Remember, MSTR didn’t just buy Bitcoin with cash on hand. They took out loans, convertible bonds, etc., leveraging themselves in a big way to scoop up more BTC. That’s cool if BTC goes up, like using a lever to lift a heavy object. But if BTC plummets, margin calls or debt covenant violations can occur. If that happens, MSTR might need to sell assets (BTC) at discount prices to cover those calls.
It’d be the ultimate heartbreak for them: forced selling at the bottom, exactly what you don’t want to do. This spiral can feed on itself, pushing the stock down further.
Right now, Saylor is the face of MSTR’s BTC strategy, but he’s no longer CEO (he’s still Executive Chairman, though). The new CEO, Phong Le, seems on board with the strategy, but in corporate America, things can change.
Suppose something happens to Saylor’s influence, or the new leadership decides the Bitcoin experiment is too risky. That could lead to strategic whiplash. Uncertain direction can make investors bail.
If MSTR’s main fallback plan for paying off debt is issuing more equity (i.e., printing new shares), existing shareholders see their positions diluted. If the stock is rallying, maybe the market soaks it up.
But if times are tough, that’s a double whammy: the stock falls due to poor sentiment, then more shares are issued, further pushing down the stock price, fueling a vicious cycle. That’s how you end up with a scenario where the stock trades nowhere near the “BTC per share” that MSTR holds.
Now, let’s loop back to the core argument: if you believe Bitcoin is a long-term winner, why not just buy BTC directly? Why go through MSTR?
When you buy MSTR, you’re essentially getting leveraged exposure to BTC. Because MSTR uses debt to buy more Bitcoin, your share price can run up more quickly if BTC starts to moon. It’s like turning the volume knob up to 11 on your guitar. More risk, more potential reward. If you’re 100% convinced BTC is heading to $500k, then MSTR might yield bigger gains than just holding BTC outright.
Sure, you could buy options or futures on BTC for leverage, but that’s a more complex route, and you might not want to dive into derivatives. MSTR is a plain old stock ticker you can buy in a typical brokerage account.
Some big funds still can’t or won’t hold BTC directly. MSTR can serve as a bridging instrument. If you foresee a wave of institutional money wanting Bitcoin exposure but only able to buy equities, MSTR could stand to benefit. The more demand for MSTR, the higher its stock price, and you see that self fulfilling prophecy effect (until it doesn’t).
If a real spot Bitcoin ETF is approved, MSTR might become less special, because folks could just buy that ETF. But if the ETF approval drags on or if it’s limited in scope, MSTR remains one of the few routes to get “pure” BTC exposure in a stock. This can sometimes cause MSTR to trade at a premium (or discount) to the underlying BTC value. If it’s a premium, shareholders benefit.
The Bitcoin debate often devolves into tribal warfare.
Maximalists believe it’s only a matter of time before BTC hits a million bucks, governments adopt it as a treasury reserve asset, and fiat currency goes the way of the dodo. Skeptics think it’s a digital pyramid scheme, inflated by hype, and bound to crash once the mania ends. The truth is likely somewhere in between. Regardless, MSTR is entrenched in the maximalist camp. So if you’re also there, you might appreciate that synergy. If you’re a skeptic, well, you’re probably reading this for comedic relief.
Never forget that the macro environment can drastically affect Bitcoin. In times of easy money, BTC soared. Then the Fed turned hawkish, and BTC got hammered. If the Fed goes dovish again, BTC might rally. That cyclical “risk on, risk off” dynamic is a reality.
Over the long haul, though, if you believe the global trend is more money printing, more inflation, and more acceptance of digital assets, BTC might remain the best known brand in that space.
In 2016, barely any big institution would touch Bitcoin. By 2020, we had publicly traded companies and even pension funds dabbling. Today, it’s a topic of daily conversation on major financial networks. We’ve seen endowments and storied hedge funds come around, albeit with caution. This institutional acceptance might be slow, but it’s real. If that wave accelerates, and BTC’s next bull cycle is fueled by big money, MSTR is sitting at the front of the line to benefit.
Let’s be real. If you’re a day trader looking for quick flips, MSTR might give you heartburn. The stock can swing massively in a single session if BTC is having a mood swing. This is not your grandmother’s utility stock. If you’re playing the short game, you might end up with whiplash. But if you’re in for the long haul, years, not weeks, MSTR can be a compelling choice worth investigating further.
Do you get sweaty palms whenever your portfolio drops 5% in a day? MSTR has been known to drop double digits in a single session. If your tolerance is low, either avoid MSTR or keep your allocation small enough that you won’t panic sell at the first sign of trouble. Let’s just say this: MSTR is not the hallmark of a “safe, stable investment.” It’s basically a leveraged bet on Bitcoin, so treat it accordingly.
If you’re plowing your entire retirement into MSTR alone, you might be setting yourself up for heartbreak if the BTC narrative fails. Consider balancing it with other positions.
I’m not telling you to sprint out and buy MSTR tomorrow morning. I’m also not telling you to avoid it like the plague. I’m simply walking you through why some folks think it’s the greatest Bitcoin proxy around, and why others see it as a ticking time bomb.
That’s finance for you, two people look at the same data and draw opposite conclusions.
You’ve got to pick which side resonates with you.
—Tom
Comments
Andres Aquino
I think it will go extremely high upon inauguration and first Trump mandates on Bitcoin. It may then drop again.
Nikhil Agrawal
Reasons I am interested in MSTR - 1. Added in Nasdaq 100 which means institutional share holding will increase 2. It's a hard asset with limited supply which can act as hedging against inflation 3. As of 1/4/2025 price is 339$ which is dropped 30% from Nov 2024 peak price. Looking at prices prior of Nov 2024, it was much lower than 339$. Seems like rally's after party still have some effects on MSTR price. So I will wait for BTC price to drop and hence MSTR prices to drop and then go in around 300$ 4. I will not have more than 5% exposure in my entire portfolio Tom - If you get time please comment on my approach. I know it depends on me but just asking for your feedback
Generico Fakero
MSTR’s management has shown they’re not shy about raising capital when they want more BTC exposure. If they decide Bitcoin is “on sale,” they could whip out the convertible or secondary offerings again. In other words, expect your slice of the pie to get a little thinner if they keep printing shares. But hey, that’s the price of riding the Saylor crypto coaster.
Generico Fakero
At the end of the day, Saylor’s locked in. He says he’ll never sell, he’s like Gollum with the One Ring, calling BTC his “precious.” Whether that’s a genius move or the world’s costliest midlife crisis, only time will tell. But I’ll admit it’s entertaining as hell to watch. It’s like a high-stakes soap opera: you can’t look away, even if half of you expects the next season to end in tears. If the cycle isn’t broken, we’ll probably see another blow-off top and a nasty drop. If the cycle is broken, and mainstream adoption kicks in, MSTR might end up doing the corporate version of a victory lap. Either way, pass the popcorn. We’ll see if Saylor’s diamond hands are actually made of unbreakable conviction—or if they crack under the next wave of volatility.
Generico Fakero
If MSTR’s fortunes improve under the friendlier crypto accounting standards, they could eventually meet the SP 500’s criteria. Factor in that Michael Saylor’s still pounding the Bitcoin drum, and you’ve got the potential for a unique corporate story that’s half software company, half crypto vault. A pioneer indeed, but whether he’s pioneering a new gold rush or just paying for the world’s largest Bitcoin museum is still up for debate. In the end, the SP folks will make their call based on standard metrics: market cap, liquidity, consecutive quarters of positive earnings, and whether they can stomach MSTR’s unique business model. If Saylor continues to steer the company’s fortunes upward with BTC on the books and these new accounting rules, the membership card might not be so far fetched. We’ll see.
sermer100
Any thoughts about future dillution of MSTR stocks?
Mark McCarthy
Wow Tom I'm a little shocked, you've converted 🤣 I bought some MSTR last year and made a nice 20% profit...before it went 4x. I have some BTC and I'm in other crypto. I do have belief long term that it has value, whether it becomes a fully used currency and replaces fiat I don't know. I do know that anyone below the boomer generation is tired of being sh*t on and find other ways to get ahead. BTC can go to 150-250k this cycle IMHO. Then probably / maybe another 60-80% drop. Saylor days he will keep buying and never sell. He owns a huge amount now. So I wondered how they affect MSTR. Before I thought it would tank hard but if he keeps buying I wonder if the company can survive 1-3 years in the doldrums before it soars again. Or maybe the cycle is broken if more adoption comes and it becomes more like Gold / S&P 500 and forms a less volatile base. I don't remember the details of his options but it seems like he has timed them for when the next cycles comes around. It's a highly debated topic and very box office to follow.
createflow%%%
MSTR got added to QQQ in Dec. 2024. And with the new accounting rules, is it possible that MSTR would get added to S&P 500? That is compelling to me. Michael Saylor in my opinion is a pioneer. All pioneers have "crazy" as their vision does not match the "average" visions.
Generico Fakero
As I wrote, it has plenty of risk but major potential as well. We shall live and see
Generico Fakero
I have already answered this question in the community chat for the Academy. Here is a copy of my answer in case you didn't see it yet: When I say “U.S. spot Bitcoin ETF,” I’m referring to a truly physically backed (or “directly backed”) ETF that holds actual Bitcoin rather than relying on futures contracts, third party trusts, or synthetic exposure. We’ve seen proposals from BlackRock, Fidelity, and others (the IBIT and FBTC you mentioned), but as of my latest intel, the SEC hasn’t given an unequivocal green light to a true spot ETF that fully and directly holds BTC on the books. They’ve historically been squeamish about market manipulation concerns, surveillance-sharing agreements, and a laundry list of other potential issues.
Hefrich21
And in eu you couldnt buy us etf. It is stupid, but it is as it is. Itake care Tom. I hope mstr will be good selection.
Hefrich21
And I think mstr is ok. Yes, it is more risk then btc, but also in some region there is tax advantage. For me 0 tax on stocks after one year holding. For pure btc at least 34% … I am ro europe :-)
Hefrich21
Tom, is this from gpt? Etf is already approved :-) : If a real spot Bitcoin ETF is approved, MSTR might become less special, because folks could just buy that ETF. But if the ETF approval drags on or if it’s limited in scope, MSTR remains one of the few routes to get “pure” BTC exposure in a stock. This can sometimes cause MSTR to trade at a premium (or discount) to the underlying BTC value. If it’s a premium, shareholders benef
Generico Fakero
solid approach
Island Boy
I'm going to stick with buying great companies based on solid fundamentals and excellent management quality. Mstr can definitely moon along with Bitcoin and I'm ok with that. Why? Because Bitcoin or similar bitcoin-based equities are not the asset class I want to be associated with. Similar to GameStop, regardless of the quick and fast rally up, most of those folks on Wall Street bets either squandered what they had or are lurking like addicts for the next meme-feeling rally. I have OWMO (Ok with missing out)😁
