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In a noteworthy development, shares of business intelligence company MicroStrategy (MSTR) continue to rise in relation to the price of Bitcoin (BTC), bringing the premium to the value of its BTC holdings to its highest level in over three years.
Notably, since the launch of Bitcoin ETFs in January, MicroStrategy stock has increased by more than 240%, setting a new record high Oct. 8. That's around eight times higher than Bitcoin's performance, which has fallen by 16% since setting its record high of nearly $74,000 in mid-March.
This development, as Bitcoin lags behind MicroStrategy's performance, has caught the attention of the market, sparking discussions among traders and market observers.
In a recent X exchange, legendary trader Peter Brandt shared his thoughts on the recent MSTR price action. An X user asked Brandt "what is your thought on MSTR? It has made a massive leg up recently without the help of Bitcoin."
Brandt replied while advising caution: "Just do not follow it. Chart looks volatile, and it will trend with Bitcoin."
Despite the recent disconnect between MSTR’s price and Bitcoin’s performance, Brandt’s view is that the two are still closely linked. He believes MicroStrategy will eventually return to trending alongside Bitcoin, meaning the stock’s long-term performance is highly dependent on Bitcoin’s trajectory.
At the time of writing, Bitcoin (BTC) was up 3.11% in the last 24 hours to $62,729.
MicroStrategy premium rises
MicroStrategy premium has increased, with MSTR stock rising 11% to a 25-year high, well-surpassing Bitcoin's 3% rise. MicroStrategy, a former business software firm that now calls itself a Bitcoin development company, owns 252,220 BTC worth almost $9.9 billion at a price of nearly $39,266 per Bitcoin as of Sept. 20, 2024.
Tomiwabold OlajideMicroStrategy's net asset value (NAV) premium has reached 2.5 times its Bitcoin holdings, the highest since February 2021.
Not only is the NAV multiple at its greatest level in years, but dividing the MicroStrategy stock price by the Bitcoin price yields 0.0030. This is the highest ratio since MicroStrategy began adopting Bitcoin in August 2020. MicroStrategy raised its "Bitcoin Yield" KPI to 5.1% from 4.4% in Q2, 2024.
Yuri Molchan
Godfrey Benjamin
Dan Burgin