While MicroStrategy crushed giants like Tesla one by one in terms of volume, the correlation between them and the rise of Bitcoin reached a record.
MicroStrategy bought approximately $4.6 billion worth of Bitcoin last week, bringing its total Bitcoin holdings to $29.7 billion. The company financed this move by issuing a $2.6 billion debt instrument. The debt notes were offered only to institutional investors and stood out as an attractive investment tool with a 0% interest rate. In parallel with these developments, the MSTR price increased significantly along with the rise in Bitcoin.
MSTR’s heavy investment in Bitcoin has pushed its share price-to-Bitcoin net asset value (NAV) ratio to 3.4, representing a 197% increase on a yearly basis.
According to MSTR-tracker data, the correlation coefficient between MicroStrategy stock price and Bitcoin (BTC) has recently reached a record high. In addition, the MSTR/BTC price ratio (100x) rose to 0.5 for the first time in history. At the same time, the premium of MicroStrategy stocks over Bitcoin net asset value (NAV) has increased by approximately 197% since the beginning of the year to 3.4. The company’s stock price has increased by 910% since the beginning of the year, showing a strong correlation with the 110% increase in the price of Bitcoin.
MSTR giants passed one by one
While the Bitcoin price is breaking new records almost every day, MicroStrategy (MSTR), known for its Bitcoin-focused investments, has attracted attention by leaving giants such as SPY and TSLA behind in terms of trading volume on US stock exchanges. The company recently made the largest Bitcoin purchase in its history and its shares attracted great attention after this development.
The interest in MSTR stock has also led to a surge in Bitcoin-focused ETFs like Defiance’s 2X Long MSTR ETF (MSTX). MSTX is designed to track MSTR’s daily performance by 200% and is up 20% this week. Options trading, particularly at higher price levels, is on the rise, with investors taking risky positions in anticipation of higher returns. Analysts warn that such high demand could increase the risk of a correction in the markets.
Finally, Bloomberg analyst Eric Balchunas noted that MSTR was the most traded stock in the U.S. in terms of trading volume on Wednesday, surpassing even Nvidia. The company’s Bitcoin strategy continues to resonate with institutional and individual investors.
Stay tuned.
