MicroStrategy Inc. (NASDAQ:MSTR) stock has seemingly diverged with respect to the movement in Bitcoin (CRYPTO: BTC) prices, this trend has been pronounced since the company started issuing more 0% convertible notes in November.
What Happened: MicroStrategy has fallen by 20.34% month-to-date about five times more than the Bitcoin prices, which was down just 4.34% in the same period.
According to an X post by the Kobeissi Letter, the gap between the two assets is widening.
MicroStrategy is the only publicly listed company holding the highest Bitcoin BTC/USD reserves, representing 2.116% of the total 21 million supply, at a cost of $41.11 billion. The company has also raised $20 billion of debt in 2024 to buy more coins.
Another post in the thread said, “For most of the year, the correlation between MicroStrategy and Bitcoin was incredibly strong. However, something began to shift over the last month, particularly as the company took on tons of debt. Then, MSTR suggested raising the authorized share count by 10 billion.”
According to Kobeissi, there shouldn’t exist such a divergence between the performance of the two assets as MSTR is considered a leveraged play on BTC. However, citing an example of a triple-levered S&P 500 ETF, Kobeissi explains how the movement in …Full story available on Benzinga.com
Bitcoin’s Levered Play MicroStrategy Witnesses Divergence: Shares Underperform BTC As Company Buys More Coins By Issuing 0% Convertible Notes
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