According to AICoin market data, BTC broke through $99,000 today (November 22), rising to a high of $99,300, approaching the $100,000 mark. Microstrategy also announced yesterday (November 21) that it has completed the issuance of $3 billion convertible senior notes due in 2029. On the same day, Citron Research tweeted that it was shorting MSTR positions for hedging.
Microstrategy Completes $3 Billion Bond Offering
MicroStrategy announced on November 21 that it had completed a $3 billion 0% convertible senior bond offering, with plans to use some or all of the proceeds to purchase Bitcoin. The bond will mature in December 2029, and the company plans to further increase its Bitcoin holdings through this offering.
According to MicroStrategy's "21/21 Plan", the company plans to raise $42 billion in the next three years, including $21 billion in equity and $21 billion in fixed-income securities, to purchase Bitcoin on a large scale. This strategy shows MicroStrategy's firm belief in Bitcoin and its long-term strategy. MicroStrategy currently holds 331,200 Bitcoins, worth more than $32 billion.
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The 0% interest rate on the bonds means that bondholders will not receive regular interest payments, but instead can receive potential returns by converting the bonds into MicroStrategy shares. This arrangement allows MicroStrategy to acquire Bitcoin at minimal ongoing costs while relying on its stock price to provide returns to bondholders. Such bonds are attractive to investors who seek Bitcoin exposure and are willing to accept stock conversions.
Citron shorts MSTR
On the same day, Citron Research, a well-known short-selling institution, announced on social media that it held a short position in MSTR, believing that its market trading volume had completely deviated from the fundamentals of Bitcoin. Four years ago, Citron first told readers that MicroStrategy was the ultimate way to invest in Bitcoin and set a target of $700. Today, MSTR has soared to more than $5,000.
Citron Research noted that “they remain bullish on Bitcoin, but they chose to short MSTR for hedging.” and said “great respect for @saylor, but he knows MSTR is overheated.”
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Citron Research's view reflects the market's doubts about the valuation of MicroStrategy's stock. MicroStrategy's market value once reached 3.3 times the nominal value of its Bitcoin holdings, a premium of more than 230%. This high premium reflects the market's recognition of MicroStrategy's unique position as a Bitcoin investment channel. As the market diversifies its Bitcoin investment channels, MicroStrategy's unique position may gradually disappear.
Is the “independence premium” disappearing?
MicroStrategy once enjoyed an extremely high premium in the traditional market due to its large-scale Bitcoin holdings. As the cryptocurrency market gradually matures and more compliant investment channels emerge, this "uniqueness premium" enjoyed by MicroStrategy is gradually weakening. Citron Research's short-selling behavior may be a reflection of the market's expectation change.
According to SoSoValue, the trading volume of MSTZ (reverse 2x short MSTR ETF) on November 21st soared, with a single-day trading volume approaching $1.53 billion, and the previous single-day trading volume was an average of $84 million. While Citron Research publicly announced that it was shorting MSTR, it also stated that as Bitcoin investment is easier than ever (currently you can buy ETFs, COIN and HOOD), MSTR's trading volume has completely deviated from BTC's fundamentals.
SoSoValue analysts pointed out that since the chairman of the U.S. Securities and Exchange Commission (SEC) will step down in 2025, subsequent regulatory policies are expected to be more friendly, and investors will have more compliant channels to enter the cryptocurrency market. This trend means that MicroStrategy's role as a unique channel for investing in Bitcoin in the traditional market will be weakened, and investors will no longer rely solely on access to the Bitcoin market through MicroStrategy.
summary
MicroStrategy's aggressive strategy in Bitcoin investment has won it market attention and investors' attention. However, as the market changes and investment channels diversify, the premium and uniqueness of its stocks may face challenges. Whether MicroStrategy can continue to maintain its position in the market will depend on its ability to cope with Bitcoin price fluctuations and the market's recognition of its strategy.
