- MSTR outperformed and separated BTC.
- It has risen 68% since September and is close to ATH.
MicroStrategy (MSTR) hit a six-month high of $198, just under $200 ATH. The recent rise coincided with a cryptic message from founder Michael Syalor.
On his latest X (formerly Twitter) mailSailors dressed like gladiators, Bitcoin (BTC) Pendant and sword.
This can be interpreted as his willingness to publicly defend and defend BTC amid financial instability and fiat-induced inflation.
Saylor is perhaps the most notable BTC bull bullish on Uber for the asset. He believes that BTC is the best asset and store of value in human history, given its fixed supply and censorship-resistant characteristics.
His stance influenced the BTC treasury strategy he pioneered through MicroStrategy.
The Bitcoin-focused software provider currently holds approximately $16 billion in BTC (252,000 coins) and acquired more than $1.5 billion in the third quarter of 2024.
$16 billion in BTC holdings spark MSTR rally
MicroStrategy’s MSTR rally is linked to the company’s large BTC holdings: famous by CryptoQuant.
“Since MicroStrategy began purchasing $BTC on August 11, 2020, its stock price has surged 1,208%, while Bitcoin itself has risen 445%.”
That said, MSTR’s large BTC holdings, acquired primarily through debt (convertible bonds), have resulted in a strong correlation with digital assets.
However, the recent rise in the stock signaled a complete decoupling from BTC.
Source: MSTR vs BTC, TradingView
Since September, MSTR has risen 68%, rising from $114 to nearly $200. Conversely, BTC is up 18% over the same period and was struggling to find decisive support at press time.
The rally even captivated BTC commentator Peter Schiff. surprised.
“What’s happening to $MSTR? Despite surging 18% in last 3 days, #Bitcoin is only up 1%.”
On a year-to-date (YTD) basis, MSTR is up 177% while BTC is up 38%. This highlighted that MSTR investors benefited more than BTC investors.
This also means that MSTR is trading at a premium compared to BTC.
However, MSTR’s RSI indicated overbought signals at press time, which could complicate the near-term outlook, especially ahead of earnings season.
Source: MSTR, TradingView
Some market observers have wondered why investors are choosing MSTR to indirectly hold BTC instead of purchasing the asset directly. However, Bitwise’s Jeff Park viewed MSTR as a long/short global carry trade.
“$MSTR is long and short global carry. Taking on debt at low interest rates to invest in Bitcoin takes a long time for global carry. Bitcoin itself is a global short carry.”
A carry trade means borrowing money from a low interest rate currency and investing it in a high yielding asset. MicroStrategy’s BTC stash was acquired through debt.
However, BTC is considered a hedging asset and is also seen as a hedge against inflation linked to fiat currencies. MicroStrategy’s move could therefore be considered a bet on global inflation (global short carry).