In the fast-paced world of tech stocks, a surprising underdog is making waves with its explosive trading volume. MicroStrategy (MSTR), the bitcoin-centric development company, is trading at levels that rival the magnificent seven – the tech giants that dominate the market with their trillion-dollar valuations. Despite its comparatively modest market cap, MicroStrategy is proving that in the realm of crypto equities, size isn’t everything.
The Magnificent Seven and the Crypto Contender
The magnificent seven – Apple (APPL), Amazon (AMZN), Google (GOOG), Microsoft (MSFT), Meta (META), Nvidia (NVDA), and Tesla (TSLA) – are the undisputed heavyweights of the tech world. With market caps soaring above $1 trillion, these behemoths dominate the stock market. Enter MicroStrategy, the bitcoin-bullish company that’s punching well above its weight.
Trading Volume That Rivals the Titans
Despite a market cap of less than $100 billion, a mere fraction of its magnificent counterparts, MicroStrategy is trading at volumes that would place it firmly in the top tier. From Dec. 2, 2024, to Jan. 7, 2025, an average of nearly 24 million MSTR shares changed hands daily. To put that in perspective, if MicroStrategy were part of the magnificent seven basket, it would rank sixth in trading volume, surpassing even Microsoft and Meta.
MicroStrategy is up around 14% year to date, with a 30-day implied volatility (IV) of 104; IV determines the market’s expectation of future price movements for the asset over the next 30-day period.
– James Van Straten, Senior Analyst at CoinDesk
Volatility: The Fuel That Drives Trading
High trading volumes are often linked to volatility, and MicroStrategy is no exception. With a 30-day implied volatility (IV) of 104, MSTR is the most volatile stock among the magnificent seven. To put that in context, the iShares Bitcoin Trust (IBIT) has an IV of around 60, making MicroStrategy 1.7 times more volatile than a direct bitcoin investment.
The Bitcoin Connection
MicroStrategy’s meteoric rise in trading volume and volatility can be attributed to its unwavering commitment to bitcoin. Under the leadership of Michael Saylor, the company has amassed a war chest of over 120,000 BTC, cementing its position as the publicly traded company with the largest bitcoin holdings. As bitcoin’s price fluctuates, so too does MicroStrategy’s stock, attracting traders eager to capitalize on the volatility.
The Future of Crypto Equities
As the crypto market continues to mature, companies like MicroStrategy are bridging the gap between traditional finance and the digital asset space. With its high trading volume and volatility, MSTR is a bellwether for the growing interest in crypto equities. As more investors seek exposure to bitcoin and other cryptocurrencies through the stock market, MicroStrategy’s trading dynamics may become the norm rather than the exception.
The Bottom Line
MicroStrategy’s trading volume and volatility are a testament to the growing intersection between crypto and traditional finance. As the magnificent seven continue to dominate the tech landscape, MicroStrategy is carving out a niche as the preeminent crypto equity. With its bitcoin holdings and commitment to the digital asset space, the company is well-positioned to benefit from the growing institutional interest in cryptocurrencies. For investors seeking exposure to the crypto market through the stock market, MicroStrategy is a name to watch.
