MicroStrategy (MSTR) is not just a software company investing in cryptocurrency; it’s also leading the way in bitcoin (BTC) capital markets, according to a research report by broker Bernstein.

“MSTR is the only company that has successfully created institutional demand for bitcoin-linked convertibles,” analysts Gautam Chhugani and Mahika Sapra wrote. So far, MicroStrategy has raised $4 billion through convertible debt specifically to buy more bitcoin. Convertible bonds are a type of debt that can be turned into shares. Michael Saylor’s company now holds 214,400 bitcoins, worth about $14.5 billion. It began purchasing the cryptocurrency as a reserve asset in 2020. “No other company has a bitcoin investing strategy capable of attracting capital at this scale,” the analysts added.

MicroStrategy’s strategy of using long-term convertible debt allows it to benefit from potential increases in bitcoin value while minimizing the risk of having to sell its bitcoin holdings. When bitcoin’s value goes up, the Virginia-based company can issue more debt. If bitcoin’s value drops and leverage increases, the company can issue new shares to reduce leverage, Bernstein noted.

This approach of utilizing both equity and debt has resulted in MicroStrategy increasing its bitcoin holdings per equity share by nearly 67% over the last four years, the report stated. Furthermore, Bernstein observed that MicroStrategy has not sold any bitcoin since it began its buying spree in 2020, and it is expected to continue raising capital to expand its bitcoin holdings.

The broker has given MicroStrategy’s stock an “outperform” rating with a price target of $2,890. Despite initially dropping by as much as 2.5%, the shares eventually traded with little change, around $1,509.

In summary, MicroStrategy stands out in the corporate world for its innovative approach to investing in bitcoin. By leveraging convertible debt and strategically managing equity, the company has built a significant bitcoin reserve without selling any of its holdings. This strategy not only demonstrates confidence in the long-term value of bitcoin but also sets a precedent for other companies considering similar investments. Bernstein’s positive outlook and high price target for MicroStrategy’s stock reflect the potential they see in the company’s unique investment strategy.