Bitcoin is up 4.5% in the present day because it erases the previous two days of promoting. It is a good transfer however leaves it proper again to the place it has been for the previous eight months. Wake me up when it breaks the $50-70K vary.
What does have my consideration in the present day is Microstrategy, which is among the best firms on this planet to worth. The reason being that it has 97% of its belongings invested in bitcoin.
Regardless of that, it is buying and selling at an all-time excessive in the present day and up 12%.
That is an enormous disconnect between the worth of the corporate’s bitcoin holdings and the corporate itself. Shares are buying and selling at 2.5 occasions the worth of its bitcoin holdings, which is non-sensical and breaks matches the highs from Feb 2021 — a time when markets have been euphoric.
In response to CoinDesk, it is bitcoin holdings are value $15.1 billion and its market cap was $37.14 billion yesterday earlier than together with in the present day’s large rally.
One thing is amiss right here.
I think a fund that might be lengthy bitcoin and brief MSTR is puking out the place.
One agency, Kerrisdale Capital has publicized that technique up to now:
Not one of the causes generally offered for MicroStrategy’s relative
attractiveness justify paying properly over double for a similar coin.
MicroStrategy’s buying and selling historical past and primary widespread sense suggests the
present inflated premium will contract, a lot because it has on prior
events, offering a compelling alternative for a pair commerce.
Now I doubt that agency is large enough to maneuver the market a lot however the technique appears like such low-hanging fruit that others have been certainly drawn in as properly.
If bitcoin was breaking out, I might anticipate that premium to increase however it’s solely up 4.5% in the present day and nonetheless a methods from $70K. Perhaps the MSTR market is front-running a breakout?
It is potential however one thing is off right here and it has my consideration. I do not suppose it is the time to brief MSTR proper now as a result of that chart is basically breaking out however sooner or later that premium to NAV must slender and I do not suppose that is far off. Within the meantime, watch how far this squeeze runs and it probably turns into a meme.