MicroStrategy’s premium to Bitcoin holdings: why It may not last
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MicroStrategy’s (MSTR) current premium relative to its Bitcoin holdings, recently hitting nearly 300%, is likely unsustainable, according to a report by Steno Research. While the company’s 10-for-1 stock split in August fueled its recent rally, Steno suggests that the upcoming launch of options on spot Bitcoin exchange-traded funds (ETFs) in the U.S. could shift investor interest away from MicroStrategy and toward these ETFs.
MicroStrategy’s premium to Bitcoin holdings: Why it may not last
Stock Split and Premium Surge
MicroStrategy’s premium has soared well above the 200% mark it maintained during the 2021 crypto bull market. This surge suggests that the company’s valuation may be diverging from its underlying assets and business fundamentals. Analysts believe the effects of the stock split are fading, and demand may further diminish as spot Bitcoin ETFs gain popularity.
ETF Options Impact on MSTR Stock Demand With the expected introduction of options on Bitcoin ETFs, investors have alternative ways to gain exposure to Bitcoin without holding MicroStrategy’s stock. This could decrease the appeal of MSTR as a Bitcoin proxy, especially if regulatory conditions continue to favor crypto and more direct avenues for Bitcoin investment emerge. Steno’s report highlights that if Donald Trump is re-elected, the pro-crypto regulatory landscape could persist, further reducing the need for MicroStrategy as a go-to vehicle for Bitcoin exposure.
Outlook: Can MicroStrategy Sustain Its Premium?
While Bitcoin’s performance is projected to remain strong into 2025, sustaining MicroStrategy’s 300% premium would require even higher buying demand. Steno’s analysis points out that with new investment products and direct Bitcoin options available, MicroStrategy may struggle to maintain its high valuation relative to its crypto holdings. As the market adapts, investors may favor holding Bitcoin directly, signaling a potential recalibration in MicroStrategy’s premium in the near future.
MicroStrategy’s premium to Bitcoin holdings: Why it may not last
Stock Split and Premium Surge
MicroStrategy’s premium has soared well above the 200% mark it maintained during the 2021 crypto bull market. This surge suggests that the company’s valuation may be diverging from its underlying assets and business fundamentals. Analysts believe the effects of the stock split are fading, and demand may further diminish as spot Bitcoin ETFs gain popularity.
ETF Options Impact on MSTR Stock Demand With the expected introduction of options on Bitcoin ETFs, investors have alternative ways to gain exposure to Bitcoin without holding MicroStrategy’s stock. This could decrease the appeal of MSTR as a Bitcoin proxy, especially if regulatory conditions continue to favor crypto and more direct avenues for Bitcoin investment emerge. Steno’s report highlights that if Donald Trump is re-elected, the pro-crypto regulatory landscape could persist, further reducing the need for MicroStrategy as a go-to vehicle for Bitcoin exposure.
Outlook: Can MicroStrategy Sustain Its Premium?
While Bitcoin’s performance is projected to remain strong into 2025, sustaining MicroStrategy’s 300% premium would require even higher buying demand. Steno’s analysis points out that with new investment products and direct Bitcoin options available, MicroStrategy may struggle to maintain its high valuation relative to its crypto holdings. As the market adapts, investors may favor holding Bitcoin directly, signaling a potential recalibration in MicroStrategy’s premium in the near future.