Market Analysis by The Tokenist (Timothy Fries) covering: MicroStrategy Incorporated, Bitcoin. Read The Tokenist (Timothy Fries)'s Market Analysis on Investing.com
, anticipating that the premium at which MicroStrategy often trades due to its Bitcoin holdings might contract, as it has in the past.MicroStrategy is often considered a proxy for Bitcoin due to its strategic decision to hold the cryptocurrency as a store of value and use debt to purchase more Bitcoin.
These developments have diminished MicroStrategy’s unique position as a way for investors to gain exposure to Bitcoin. While MicroStrategy’s stock has surged over 200% alongside Bitcoin’s record rally, Kerrisdale notes that the premium to Bitcoin can both benefit and harm shareholders. Betting against MicroStrategy has been unprofitable for short sellers, who have faced significant paper losses this year. However, Kerrisdale’s pair trade strategy suggests that there may be an opportunity to profit from the potential contraction of MicroStrategy’s premium while still benefiting from the appreciation of Bitcoin itself.MicroStrategy has amassed a significant portfolio of Bitcoin, totaling 214,245 Bitcoins at a current price of $71,413.03 per Bitcoin.
The portfolio has experienced varying degrees of profit across different transactions, with percentages ranging from 20.4% to over 500% for specific buys.MicroStrategy shares were trading at $1,889.00, down $30.16 , as of 10:40 AM EDT on Thursday. Near end-of-day trading, the stock was down 9.65%.
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