📉 MicroStrategy's Bitcoin holdings are at a 300% premium, is this situation unsustainable?
Steno Research recently released a report that mentioned that MicroStrategy (the company founded by Michael Saylor) is now at a premium of nearly 300% relative to its Bitcoin holdings, and believes that this situation may not be sustainable.
The report stated that the main reason for the premium was the positive impact of MicroStrategy's previous 1:10 stock split. But this effect is slowly disappearing, and the United States has now launched spot Bitcoin ETF options, which may make investors more inclined to hold ETFs directly rather than MicroStrategy's shares.
Think about it, during the 2021 cryptocurrency bull market, MicroStrategy's premium was less than 200% most of the time. However, the current premium level is too big compared to their assets and business fundamentals!
The report believes that if Trump is re-elected, it is expected that the regulation of Bitcoin and cryptocurrencies will continue to remain friendly, which may make more investors choose to hold Bitcoin directly instead of buying MicroStrategy's shares.
The report also said that Bitcoin will perform strongly in the future, but if MicroStrategy wants to maintain its current premium, it will need more buying demand to support it.
🗣️ Conclusion:
MicroStrategy is well-known for its Bitcoin holdings, and its stocks are also regarded as leveraged Bitcoin to some extent. Therefore, for some institutions and individuals who cannot directly or legally invest in Bitcoin, choosing similar leveraged Bitcoin stocks is a good strategy.
However, this investment strategy amplifies the potential returns while also amplifying the risks. At the same time, any sharp correction in the Bitcoin market may have a drastic impact on these leveraged Bitcoin stocks, thereby amplifying investors' losses.
Therefore, whether holding cryptocurrencies directly or investing indirectly through related stocks, risk management should be the top priority for investors. In the end, let us remain vigilant and ride the wave of this emerging market wisely.
💬 Do you agree that MicroStrategy's Bitcoin premium will decline? Would you consider buying its shares to obtain potential premiums?
