MicroStrategy’s Current Premium Relative to Its Bitcoin Stack Is Unlikely to Last: Steno Research

As a seasoned researcher with over two decades of experience under my belt, I’ve seen many market trends come and go. The current premium that MicroStrategy (MSTR) is commanding relative to its bitcoin (BTC) holdings strikes me as an anomaly that won’t last long.

According to a report released on Friday, it’s highly improbable that the current advantage MicroStrategy (MSTR) has over its Bitcoin (BTC) holdings will persist, as per Steno Research.

“This conviction is reinforced by the diminishing effects of MicroStrategy’s recent stock split,” analyst Mads Eberhardt wrote, adding that the launch of options on spot bitcoin exchange-traded funds (ETFs) in the U.S will also lessen the motivation for investors to hold the stock over these ETFs.

In August, the software firm established by Michael Saylor executed a 10-to-1 stock division, an action which, as per Steno’s analysis, has played a significant role in the recent surge of its stock price.

Steno observed a significant increase, nearly tripling, in the company’s value compared to its Bitcoin holdings.

According to the report, it appears that the company’s estimated value is “deviating considerably from a simple assessment based on its assets and core operations.

With regulators growing increasingly supportive towards Bitcoin and cryptocurrencies, some investors might opt for owning Bitcoin outright rather than investing in MicroStrategy shares, as suggested by Steno. Should Donald Trump secure a second term, this favorable regulatory trend is anticipated to persist.

According to a recent report, Bitcoin is anticipated to show significant growth during this quarter and up until 2025. Consequently, for MicroStrategy to maintain its current high value, there needs to be an even greater demand for buying it.

The current premium of MicroStrategy, as mentioned in the report, appears to be unsteady, considering that it remained below double its value for a significant portion of the 2021 cryptocurrency market surge.

The stock recently hit a new all-time high, having surged over 240% year-to-date.