In the first quarter of 2025, fourteen US states significantly increased their investments in MicroStrategy (MSTR) stock, collectively holding $632 million worth, marking a staggering 91% rise from the previous quarter. This move highlights a strategic trend among state governments to gain Bitcoin exposure indirectly through an equity investment rather than direct cryptocurrency purchases or spot Bitcoin ETFs.
California leads with $276 million in MSTR stock across its major public pension funds, CalSTRS and CalPERS, both of which increased their holdings substantially. Florida, North Carolina, and New Jersey also reported significant increases in MicroStrategy shares. Utah exhibited the fastest growth rate in MSTR holdings at 184% quarter-on-quarter, demonstrating accelerating institutional interest in crypto-backed equities even among smaller states.
The appeal of MicroStrategy lies in its large Bitcoin reserves and the leadership of Michael Saylor, making its stock a proxy for Bitcoin's price movements but with added operational risks related to the company's core business. For state investment boards facing regulatory complexities or asset mandates, investing in MSTR offers a more traditional and accessible way to gain crypto exposure.
Contrasting strategies were revealed with Wisconsin's Investment Board selling its $300 million stake in BlackRock’s iShares spot Bitcoin ETF while increasing its MSTR holdings by 26%, reflecting differing approaches and risk assessments across states concerning cryptocurrency exposure. New Jersey also expanded its stake in MicroStrategy across its pension funds.
This growing institutional interest in MicroStrategy underscores increasing legitimacy for Bitcoin as an asset class and signals a broader acceptance of digital assets in traditional finance. It may also pave the way for further direct institutional crypto investments as regulatory clarity improves.