Cryptocurrency analyst James Van Straten recommended having exposure to MicroStrategy Inc. (NASDAQ:MSTR) in the newly announced U.S. sovereign wealth fund instead of spot Bitcoin (CRYPTO: BTC) on Monday.
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What Happened: In an X post, Van Straten weighed in on the potential equity exposure in the first-of-its-kind state-owned investment vehicle announced by President Donald Trump.
“I’d rather see the fund have exposure to MSTR through its convertible bonds than for it to buy BTC,” the analyst wrote.
When asked about the rationale behind proposing such an idea, Van Straten argued that accumulating large amounts of Bitcoin would significantly push the prices up, causing a potential problem for U.S.-based entities who routinely purchase the asset.
“All the BTC that is owned within the US – MSTR, ETFs etf is the US BTC IMO. You want to shore it all up,” he added.
Why It Matters: Van Straten’s comments come in the wake of the Trump administration’s plans to monetize government-owned assets to generate economic value for the American people. The sovereign fund would hold a variety of “liquid assets” and strategic holdings.
Speculations about the federal government’s investments in Bitcoin have soared since Trump took office. The president signed an executive order last month that will evaluate the creation of a “strategic national digital assets stockpile.”
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Michael Saylor-led MicroStrategy has been on a Bitcoin buying spree, with the company’s stockpile growing to 471,107 BTC, worth over $46.46 billion, as of this writing.
A key feature of this strategy is issuing convertible bonds at 0% interest to fund the purchases. However, skeptics have been critical, warning of potential liquidations if Bitcoin’s value declines drastically.
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Price Action: At the time of writing, Bitcoin was exchanging hands at $98,768.54, up 5.43% in the last 24 hours, according to data from Benzinga Pro.
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Shares of MicroStrategy closed 3.67% higher at $347.09 during Monday’s regular session.
The stock has a consensus price target of $454.54 based on the ratings of 13 analysts, with an average price target of $605 between Bernstein and Mizuho.
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