According to CoinDesk, traders are exhibiting caution towards Nasdaq-listed MicroStrategy (MSTR), a company known for its leveraged exposure to bitcoin (BTC). This shift in sentiment is evident as the 250-day put-call skew for MSTR, which measures the difference in implied volatility between put options (sell) and call options (buy), has moved from -20% to zero over the past three weeks, as reported by Market Chameleon. This indicates that call options, previously trading at a premium due to bullish expectations, are now on par with put options, reflecting a neutral market stance.
This change in sentiment coincides with a significant decline in MSTR's share price, which has dropped over 44% to $289 from a record high of $589 on November 21. The valuation has decreased by 34% in just the past two weeks, according to TradingView data. Markus Thielen, founder of 10x Research, noted in a client note that the narrative of companies adopting bitcoin as a treasury asset, which once provided a tailwind for MicroStrategy, seems to be losing momentum. MicroStrategy began its bitcoin acquisition strategy in 2020, amassing 446,400 BTC, valued at $42.6 billion, often financed through debt sales. This strategy positioned MSTR as a leveraged bet on BTC, resulting in a 346% gain in 2024, significantly outperforming BTC's 121% rise.
However, the end of the year saw disappointing results, with MSTR shares falling by 25% in December, while BTC only declined by 3%, maintaining stability above $90,000. This underperformance suggests that MSTR's attractiveness as a leveraged play on BTC is waning. Thielen pointed out that despite substantial bitcoin acquisitions, investors are reluctant to pay an implied price of $200,000 or more per bitcoin through MicroStrategy when they can purchase it directly at a lower cost. This shift in investor behavior highlights a growing preference for direct bitcoin investment over leveraged exposure through MSTR.
