Given that Bitcoin (BTC 1.01%) is up an incredible 600% since August 2020, it might seem incomprehensible that any tech stock has been able to keep up with that blistering pace.

But what if I told you that one tech stock is up more than 1,800% during that time period? That tech stock is Strategy (MSTR 13.00%), the company formerly known as MicroStrategy. It might be the only tech stock with more potential than any cryptocurrency.

Strategy's stock market performance

Strategy has outperformed every other company in the S&P 500 since August 2020. As seen in the chart, even tech superstar Nvidia (NVDA 5.27%), up a staggering 855%, has been unable to keep up with Strategy.

Bitcoin / U.S. dollar chart by TradingView

Strategy's impressive gains, of course, have coincided with its decision to embark on a massive Bitcoin buying binge that started in August 2020. The company has now accumulated nearly 500,000 Bitcoins, making it the largest corporate holder of Bitcoin in the world.

That's no mean feat -- it's equivalent to more than 2% of all Bitcoin in circulation. And it means Strategy holds significantly more Bitcoin than the U.S. government, which holds approximately 200,000 Bitcoins.

The rise of the Bitcoin Treasury Company

Until 2020, Strategy was an enterprise software company. But it has now become a Bitcoin Treasury Company (BTC). According to Michael Saylor, the founder and executive chairman of Strategy, BTC refers to a company that is entirely Bitcoin-centric. It exists, quite simply, to buy as much Bitcoin as it can.

The company even changed its name in February to reflect that fact. The company's brand identity now includes the iconic Bitcoin symbol, and the change from "MicroStrategy" to "Strategy" is meant to highlight how the company now only has one macro (not micro) strategy: Bitcoin.

The company has gone so all-in on Bitcoin that it announced a plan at the end of 2024 to buy $42 billion worth of new Bitcoin over the next three years. It will finance half of that with equity, and the other half with debt.

The decision to take on debt to buy new Bitcoin has raised more than a few eyebrows. It would be much like your next-door neighbors announcing plans to max out their credit cards, all to buy as much Bitcoin as they can. Saylor told audience members during his keynote speech at the Bitcoin 2024 event in Prague last summer that they should essentially do exactly that. A true Bitcoin maximalist, he says, should be willing to take any step possible to own as much Bitcoin as humanly possible.

Risk factors

So what could go wrong? Well, you guessed it: The price of Bitcoin could fall, as it is doing right now. That helps to explain why the price of Strategy stock is down nearly 20% year to date. It is so highly leveraged to the price of Bitcoin that it responds to any price movement of Bitcoin in the crypto market.

Image source: Getty Images.

Some analysts and academics are now calling into question the current valuation of Strategy itself. The company is valued at significantly more than the value of its Bitcoin holdings. At a current price of $239, Strategy is currently worth $60 billion. Meanwhile, its Bitcoin holdings are worth approximately $40 billion.

Keep in mind: Strategy's enterprise software unit is a money-losing business and no longer a core focus. As a result, the value of Strategy is almost entirely dependent on the value of its Bitcoin hoard. So it's not entirely out of the question to suggest that Strategy's valuation could fall further if Bitcoin continues to decline.

That being said, plenty of analysts think the value of Strategy will rise over time. Those same analysts, of course, think the price of Bitcoin will also rise over time. As long as Strategy can "out-Bitcoin" Bitcoin, it might just be possible.

The creation of a new Strategic Bitcoin Reserve by the U.S. government might just be the key to unlocking even more value at Strategy, since it would likely encourage new Bitcoin buying around the world. Not surprisingly, Saylor is now urging the U.S. government to buy 25% of all Bitcoin in circulation by the year 2035. That type of aggressive buying would surely push Strategy higher over the next decade as it rides the wave of Bitcoin price appreciation.

Should you buy Strategy or Bitcoin?

Strategy has enormous upside potential. And you can't argue with its stock market performance over the past five years. It has been a total beast.

At the end of the day, though, I'm sticking with Bitcoin. From my perspective, Strategy is too highly exposed to wild volatility swings in the crypto market. Over the long haul, I'm not convinced that any tech stock -- not even Strategy -- can outperform Bitcoin.