Think it’s too late to buy MicroStrategy? Here is the biggest reason why there is still time.

MicroStrategy (MSTR 0.84%) shares have doubled in 2024 and tripled over the past 52 weeks.

When Bitcoin (BTC -0.24%) leaps and bounds, MicroStrategy soars; the enterprise software specialist turned Bitcoin manager on steroids. The correlation between this stock and Bitcoin prices was similar to the statistical link between S&P 500 and Dow Jones Industrial Average market indices of the last three years.

MicroStrategy currently holds 226,500 Bitcoins, worth $13.4 billion at today’s Bitcoin prices. It only has $67 million cash equivalent on hand, with the rest of its cash reserves converted to Bitcoin. The strategy includes investing fresh cash flow from the software business into more Bitcoin holdings, taking on new debt and selling shares on the open market to finance additional cryptocurrency purchases.

“Our goal is to accumulate Bitcoin holdings at a faster rate than we issue shares,” MicroStrategy CEO Phong Le said in this month’s second-quarter earnings call.

MSTR data by YCharts

MicroStrategy as a leveraged Bitcoin ETF

Later on the same earnings call, co-founder and executive chairman Michael Saylor described MicroStrategy as a more flexible and ambitious version of spot Bitcoin exchange-traded funds (ETFs). ETFs simply buy and sell Bitcoin to match their shareholders’ demand for the cryptocurrency. MicroStrategy is taking it a step further by trying to go beyond the pure Bitcoin chart and identify Bitcoin ETFs by adding more capital to its cryptocurrency holdings.

“The key to outperforming is using that capital responsibly and using our operational flexibility responsibly,” Saylor said.

So if you think Bitcoin will increase in value over time, you can see MicroStrategy as a leveraged play on that trend. It’s a risky idea because MicroStrategy stock will also amplify the cryptocurrency’s bearish moves and could hit zero in a very cold crypto winter. At the same time, the long-term upside could be tremendous, as long as MicroStrategy survives any challenges along the way.

So it’s not too late to buy MicroStrategy, as long as you agree that Bitcoin will continue to rise, smoothly enough to keep this company in business.