MicroStrategy Leads 2024 with Exceptional Gains Despite December Struggles

MicroStrategy (MSTR), a software company turned bitcoin (BTC) accumulator, has had a challenging December, with its stock dropping nearly 50% since November. This decline followed the company’s inclusion in the Nasdaq 100 index and a remarkable surge of 600% earlier in the year. Despite the recent setback, the Virginia-based firm has posted a stellar 342% gain in 2024, placing it among the top-performing crypto-linked assets in the traditional finance (TradFi) sector.

The year has been marked by market turbulence, with geopolitical tensions and technological progress shaking investor confidence. Ongoing conflicts in Eastern Europe and the Middle East, global elections, the unwinding of the yen carry trade in August, and the rapid growth of artificial intelligence (AI) have all impacted financial markets in unpredictable ways.

MicroStrategy’s performance for the year is nearly double that of Nvidia (NVDA), the semiconductor giant that gained 185% due to its key role in producing chips for AI applications. Other prominent tech stocks, such as Meta Platforms (META), posted more modest returns, with a 71% increase. Bitcoin, on the other hand, surged by 100%, benefiting from the approval of U.S. spot exchange-traded funds (ETFs) in January, coupled with multiple record highs. Bitcoin’s growth outpaced its competitors, ether (ETH), which rose 42%, and Solana (SOL), which gained 79%.

The iShares Bitcoin Trust (IBIT), a Bitcoin-focused ETF, also saw an impressive 100%+ return, quickly becoming the fastest ETF to hit $50 billion in assets under management.

While Bitcoin miners struggled overall, some companies in the sector experienced significant growth. The Valkyrie Bitcoin Miners ETF (WGMI), which tracks mining stocks, rose just under 30%. However, individual miners such as Bitdeer (BTDR) and WULF (WULF) delivered standout performances, with returns of 151% and 131%, respectively. Despite the broader sector’s underperformance, these miners still managed to outperform traditional equities.

The Nasdaq 100 Index (NDX) grew by 28%, and the S&P 500 Index (SPX) rose by 25%, while gold outpaced both, rising 27%. Gold has now outperformed the S&P 500 for three of the last five years.

On the bond front, concerns over inflation and the U.S. budget deficit contributed to a sharp rise in U.S. Treasury yields. The yield on the 10-year Treasury note rose 15% to reach 4.5%, marking an increase of 100 basis points since the Federal Reserve began cutting interest rates in September.

The iShares 20+ Year Treasury Bond ETF (TLT) fell 10% this year, continuing a 40% decline over the last five years.

The U.S. dollar (DXY Index) strengthened throughout the year, reaching its highest point since September 2022, signaling the continued strength of the greenback. West Texas Intermediate (USOIL), meanwhile, remained nearly unchanged, with a slight increase of less than 1%, closing the year at approximately $71 per barrel. The price of oil fluctuated significantly, briefly spiking to nearly $90 at times.

Looking ahead to 2025, markets will closely monitor critical issues like the U.S. debt ceiling debate, the policies of President-elect Donald Trump, and whether the U.S. can sustain its impressive growth momentum.