MSTR surged over 6% before the US stock market opened on Monday, but subsequently retreated, ultimately closing down more than 4%.
Written by: He Hao
Source: Wall Street Journal
On November 25, Monday, Bitcoin continued to decline from the weekend, dropping below $94,000 during trading. Bitcoin attempted to break the $100,000 barrier last week but failed, leading to strong profit-taking sentiment, and it has now fallen about $6,000 from its historical high, breaking below the November 21 low of $93,850.62.
Ethereum, on the other hand, remained relatively strong, with an intraday increase of up to 3.9%, exceeding around $3,500, but later also experienced a pullback, following the trend of Bitcoin.
On the same day, blockchain concept stocks had mixed performances. Kodak rose by 18.6%, Beyond Inc. rose over 9.4%, Ebang International ADR rose over 8.6%, Applied Digital rose over 8.4%, Ethereum ETF FETH rose 6.65%, Robinhood rose about 3.3%, and cryptocurrency exchange giant Coinbase rose about 2.5%. 'Bitcoin whale' MSTR fell over 4%, TeraWulf fell over 6%, and BTC Digital fell over 8%.
On the news front, Bessent has been nominated by the US Treasury Secretary, and investors expect him to prioritize economic and market stability, ushering in the 'Mnuchin 2.0' era, knowing where the red lines are. The new government's fiscal policy will adopt a gradual approach, implementing tariff policies in phases rather than as aggressively as promised during Trump's campaign. This has caused the dollar and Bitcoin to decline, while US bonds rose.
There is good news in the cryptocurrency market on the same day. Currently, Wall Street is actively preparing to launch new cryptocurrency-related ETFs. With the election of Trump, a supporter of digital currency assets, as the next US president, media reports indicate that executives and lawyers involved in ETFs are devising strategies to comprehensively cater to different investor preferences.
The new cryptocurrency-related ETFs currently in preparation include both defensive ETFs aimed at professional fund managers interested in cryptocurrencies, as well as highly speculative bets aimed at individuals with a high risk appetite. High-risk cryptocurrency ETFs may focus on a variety of digital tokens and may sometimes use leverage, options, or quantitative strategies.
Previously, some cryptocurrency-related ETFs that purely track Bitcoin have attracted billions of dollars since the US election.
The industry generally expects that the US Securities and Exchange Commission (SEC) under Trump will be more accepting of new digital currency products than under the Biden administration. The SEC will welcome new leadership, and the ETF industry is entering a 'Wild West' era.
Currently, several digital asset companies have applied to the SEC to launch ETFs tracking cryptocurrencies such as Solana, XRP, and Litecoin. The chances of these ETFs being approved under the SEC led by Gary Gensler are very low, but under the new government, their approval likelihood is higher. Additionally, tokens like Aave, Uniswap, and Maker are also suitable for ETF products.
On the same day, the well-known Wall Street firm Bernstein significantly raised its target price for 'Bitcoin whale' MSTR from $290 to $600, expecting a further 40% upside. This is in stark contrast to Citron's recent bearish stance.
Bernstein expects that by 2033, MSTR will hold 4% of the global Bitcoin supply. Currently, the company holds 1.7% of the supply. Bernstein believes that MSTR's Bitcoin asset management model is unparalleled. According to Bernstein, Bitcoin is in a structural bull market, with favorable regulations, support from the US government, institutional adoption, and a favorable macroeconomic environment.
Additionally, another brokerage, Canaccord, raised its target price for MSTR from $300 to $510 and reaffirmed its buy rating. Canaccord stated that a new method should be adopted to value MSTR. 'Traditional profit and loss indicators are no longer applicable to MSTR, as the company's software business accounts for only a single-digit percentage of the current enterprise value. The dollarized per-share BTC appreciation reflects everything that is happening with MSTR.'
MSTR CEO Michael Saylor, when discussing being shorted, stated that Citron does not understand where MSTR's premium relative to Bitcoin comes from. The company profits through volatile trading while also leveraging through ATM operations, so as long as Bitcoin continues to rise, the company can still make money, which is an important profit point overlooked by short sellers. 'Based on an 80% Bitcoin price difference, $3 billion in ATM financing could bring about $125 in earnings per share over 10 years.'
MSTR surged over 6% before the US stock market opened on Monday, but subsequently retreated, ultimately closing down more than 4%.
