Michael Saylor has given us a look at Strategy's Bitcoin plan, and the numbers show why the company's stock does o't just follow the leading cryptocurrency's price — it often trades at a big premium.
The latest numbers show the firm with 628,946 BTC, worth about $75.82 billion at current prices, with an average buy-in of $73,288 per coin. That haul is up about 64.48% since the first purchase in August 2020 and now makes up just under 68% of MicroStrategy's $112 billion market cap.
But the stock itself — which is now worth $397 — has a market value and trading behavior that just does not line up with owning Bitcoin.
For Saylor, it is a combination of different things that make it happen. First is "credit amplification," which lets Strategy boost its Bitcoin exposure by two to four times through debt and other leverage tools — something spot Bitcoin ETFs and direct BTC ownership cannot replicate.
Then there is the deep options market for MSTR shares, with over $100 billion in open interest; that is more than the size of similar markets for Bitcoin ETFs or CME Bitcoin futures, according to Saylor's graphics.
Why does Bitcoin strategy just work?
MSTR's position on major indices like the NASDAQ 100, MSCI and Russell 1000 ensures passive capital flows into the stock, regardless of Bitcoin news. The company also has access to trillions in equity and credit markets, which direct Bitcoin holders do not.
The result is a NAV multiple of 1.475, meaning investors are paying more than the value of Strategy's BTC holdings. Investors are also buying into the leverage, liquidity and reach of the stock. Those looking to invest in Bitcoin with added power should consider MSTR, which is a turbocharged version.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team