American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

MicroStrategy’s NAV premium hits highest level since 2021 as BTC falls 16%

by admin October 12, 2024
October 12, 2024
MicroStrategy’s NAV premium hits highest level since 2021 as BTC falls 16%

MicroStrategy Inc. (MSTR) has seen its net asset value (NAV) premium surge to its highest level since February 2021, despite Bitcoin’s ongoing price decline.

The NAV premium, which reflects the market value of MicroStrategy’s stock relative to its Bitcoin holdings, has climbed to 2.5 times, according to recent data.

As of this writing, MicroStrategy’s market capitalization stands at approximately $37.14 billion, while its Bitcoin holdings—totaling 252,220 BTC—are valued at $15.1 billion.

This premium increase has persisted even as Bitcoin (BTC) has dropped by 16% over the year.

MicroStrategy stock outperforms Bitcoin in 2024

While Bitcoin has struggled, MicroStrategy’s stock has surged in 2024. Since the launch of Bitcoin exchange-traded funds (ETFs) in January, MicroStrategy shares have soared more than 240%, hitting an all-time high on October 8.

In contrast, Bitcoin has declined 16% since its peak in March, showing a clear divergence in performance between the two assets.

Currently, MicroStrategy shares are trading at 0.0030 times the price of Bitcoin, the highest ratio since the company began holding Bitcoin on its balance sheet in 2020. Investors seem increasingly drawn to the stock, seeing it as a way to gain returns that outperform Bitcoin itself.

Source: CoinDesk

MicroStrategy’s aggressive Bitcoin acquisition strategy

The rise in MicroStrategy’s premium is largely driven by its aggressive strategy of acquiring Bitcoin through both debt and equity financing.

Since adopting Bitcoin as a key balance sheet asset in August 2020, the company has consistently increased its holdings, often using at-the-market (ATM) equity offerings and convertible senior notes to raise capital.

Source: CoinDesk

This strategy has enabled MicroStrategy to significantly boost its Bitcoin holdings per share. Currently, each share represents approximately 0.0012 Bitcoin.

Despite the risk of shareholder dilution, the company has managed to grow its Bitcoin stash faster than the dilution rate, maintaining a favorable position for shareholders.

Source: CoinDesk

MicroStrategy’s Bitcoin yield continues to grow

A key metric for MicroStrategy is its “Bitcoin Yield,” which measures the quarter-over-quarter percentage change in the ratio of Bitcoin holdings to outstanding diluted shares.

In the second quarter of 2024, this metric rose to 5.1%, up from 4.4% in the previous quarter, highlighting the company’s ability to increase its Bitcoin holdings despite market volatility.

As long as MicroStrategy maintains this aggressive accumulation strategy, its stock price premium relative to its Bitcoin holdings could continue to expand. Investors may see the stock as a leveraged way to gain exposure to Bitcoin’s price movements.

Future of MicroStrategy’s Bitcoin premium

With its track record of leveraging Bitcoin to enhance shareholder value, MicroStrategy’s NAV premium is likely to stay elevated for the foreseeable future.

If Bitcoin prices recover or demand for the stock remains strong, the ratio between the company’s market cap and its Bitcoin holdings could reach new highs.

However, risks persist. A prolonged downturn in Bitcoin prices or financial strain from MicroStrategy’s significant debt load could pose challenges.

Nonetheless, the company’s unique approach to balancing Bitcoin acquisition with shareholder returns makes it an attractive option for investors seeking indirect exposure to Bitcoin without directly holding the cryptocurrency.

The post MicroStrategy’s NAV premium hits highest level since 2021 as BTC falls 16% appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Warby Parker: Is it a better stock than EssilorLuxottica?
next post
SoFi stock could enter beast mode: Oct. 29 earnings will be key

Related Posts

Berkshire Hathaway stock price is thriving: could BRK...

April 25, 2025

Alphabet and Microsoft earnings approach: Microsoft looks like...

October 18, 2024

The lunch rush is dead as Americans live...

May 21, 2024

Dave & Buster’s plan to allow betting on...

May 9, 2024

UnitedHealth executive fatally shot; investor day cancelled

December 5, 2024

NYSE says technical issue fixed after Berkshire Hathaway...

June 5, 2024

As the IHG share price soars, does it...

September 30, 2024

Europe markets open: Stoxx 600 hovers near flatline;...

May 28, 2025

What CoreWeave IPO means for Goldman Sachs

March 31, 2025

Dow Futures trade mixed today: 5 things to...

July 29, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • How Donald Trump’s immigration crackdown may tank the labor market

      August 4, 2025
    • Trump’s tariff threat looms over India’s Russian oil deals

      August 4, 2025
    • Trump moves nuclear submarines near Russia: what triggered the move and what’s ahead

      August 3, 2025
    • BOE rate cuts offer little relief as UK households face mounting financial strain

      August 3, 2025
    • Retail investors shift focus to Europe as US valuations stretch

      August 3, 2025

    Categories

    • Business (3,573)
    • Investing (2,700)
    • Latest News (2,031)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved