Investing.com - Strategy (NASDAQ:MSTR) is an "attractive proxy" for investors looking for specific types of exposure to Bitcoin, according to analysts at Keefe, Bruyette and Woods.

In a note to clients initiating their coverage of the Bitcoin stockpiler with an "outperform" rating, the analysts led by Bill Papanastasiou said the stock provides "levered exposure" to the world's most popular cryptocurrency as well as "additional torque from accretive Bitcoin purchases that are fueled by highly demanded security issuances and a valuation that exceeds net asset value."

"Strategy has a number of tools to use that could help fund the expansion of its Bitcoin treasury," Papanastasiou wrote, adding that the firm's management is exploring "novel ways" to financially engineer digital asset-related securities for a "wide breadth of investor profiles."

Meanwhile, Strategy is also "climbing the ranks into index inclusions," with a potential entry into the benchmark S&P 500 "on the horizon," Papanastasiou said. It has already secured a spot on the tech-heavy Nasdaq 100 index.

The firm may benefit as well from a more favorable regulatory environment for the cryptocurrency industry during the new administration of U.S. President Donald Trump, Papanastasiou added. Trump himself has vowed to loosen the reins on the sector, saying he would be a "crypto president" and promote the adoption of digital assets.

"If Bitcoin adoption reaches a near-term inflection point, we believe Strategy is well-positioned for further upside as it represents both a directional play on the spot price as well as the underlying volatility, two key characteristics that are demanded by equity and fixed income investors," Papanastasiou said.

The comments come after Strategy posted a fourth straight quarterly loss earlier this week, as the largest corporate holder of Bitcoin was hit with an impairment charge from digital assets of $1.01 billion. In the year-ago quarter, the Virginia-based group, formerly known as MicroStrategy, had booked an impairment charge of $39.2 million.

Since it began snapping up Bitcoin in 2020 to offset weakness at its software business, Strategy has become one of the leading beneficiaries of the token's notoriety. In the last one-year period, its shares have skyrocketed by more than 540%.

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