Bitcoin Soars, But Strategy’s Stock Struggles to Keep Up
MSTR raises $348M to buy more BTC, yet underperforms the crypto it tracks
MSTR Adds to Bitcoin Holdings Amid Stock Offering
Strategy (NASDAQ: MSTR), the largest publicly traded holder of Bitcoin, disclosed that it raised $348.7 million by selling 847,000 shares between May 19 and May 25.
- The proceeds were used to purchase an additional 4,020 Bitcoins, bringing MSTR’s total to 580,250 BTC.
- Since 2020, MSTR has consistently used capital markets to increase its Bitcoin exposure, making it a proxy for institutional investors seeking indirect crypto exposure.
This latest move reinforces the firm’s long-standing strategy to treat Bitcoin as a treasury reserve asset.
Bitcoin Hits New Highs, But MSTR Lags Behind
Despite Bitcoin recently crossing $110,000, MSTR stock remains well below its all-time high of $543.
- The disconnect between Bitcoin’s strength and MSTR’s stagnant performance has raised red flags among traders.
- This performance gap is leading some to question the stock’s ability to keep pace with the asset it shadows.
Such divergence is unusual and could indicate shifting sentiment or growing concerns around the company’s valuation mechanics.
Bearish Sentiment Emerging Among Analysts
Markus Thielen of 10x Research is among those betting against the stock’s near-term prospects.
- He has recommended a bearish options trade, buying a $370 put and selling a $300 put expiring June 27, a move that pays off if MSTR falls to $300 or below.
- Thielen pointed out a similar divergence between MSTR and Bitcoin in 2021, which preceded the last major crypto peak.
He views this price gap as a potential signal that larger investors are turning cautious, especially as MSTR’s buying no longer lifts its share price as strongly as in previous cycles.
Investor Implications: Divergence May Signal a Shift
According to Thielen, this divergence “matters” and could be an inflection point for investors watching both MSTR and Bitcoin.
- While Bitcoin’s rally continues, MSTR may be experiencing valuation fatigue, especially as its leveraged approach to Bitcoin becomes more mature.
- For investors, this creates a complex risk-reward profile, where exposure to Bitcoin through MSTR may no longer offer the same upside.
Is MSTR Still a Buy?
Despite recent concerns, Wall Street analysts maintain a Strong Buy rating on MSTR.
- However, the growing divergence between MSTR and Bitcoin is a critical factor for investors to watch.
- For those bullish on crypto, MSTR remains a viable proxy, but short-term caution may be warranted, especially amid increased volatility and profit-taking.
Ultimately, MSTR’s outlook will hinge not just on Bitcoin’s direction, but on how the market values its unique crypto-heavy strategy going forward.
