MicroStrategy's Collapsed Bitcoin Premium Raises Concerns

3 months ago

"So, the company formerly known as Micro Strategy reported earnings this week. Chart Kid made this looking at the ratio of Strategy to Bitcoin. And this peaked a year ago actually in November 2024 and it has been straight down for the last really since July. It's been acting really funky in a bad way. The next chart shows the value of their Bitcoin holdings compared to the market cap and people are heming and hawing a year ago. Why are they getting such a premium? Well, guess what? That premium collapsed. Matt also showed the market cap value divided by the Bitcoin holdings value and it peaked at like 3.5 times. It's now 1.2 times."

The discussion highlights MicroStrategy's recent earnings report, emphasizing a significant collapse in the premium between its market cap and Bitcoin holdings. The ratio that peaked at 3.5 times has now shrunk to 1.2 times, indicating mounting concerns about the sustainability of its valuation and underlying fundamentals. This company-specific commentary gives investor color on potential risks associated with the current premium levels.

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