Key Points
- MicroStrategy (MSTR) and Bitcoin [BTC] prices have recently dropped, indicating a broader market downturn.
- Kerrisdale Capital suggests Bitcoin is a better investment than MicroStrategy stock due to its superior value proposition.
The market has recently been on a decline, with major cryptocurrencies and stocks experiencing a downturn. Data reveals that MicroStrategy (MSTR) plummeted by 11.18% in a single day, while Bitcoin [BTC] slipped by 0.95%.
The Value of MSTR and BTC
Despite this, MSTR’s overall value stood at $1,704, marking a 66.65% increase over the month. On the other hand, Bitcoin was priced at $70,849, with a 15.8% one-month rise. Investment management firm Kerrisdale Capital noted that the current valuation of MicroStrategy is excessively high compared to the value of BTC, which it holds as an asset.
Kerrisdale Capital’s Stance
Following the approval of multiple spot BTC exchange-traded funds (ETFs) this year, Kerrisdale Capital believes there’s decreasing motivation for investors to trade MicroStrategy stocks for Bitcoin exposure. The firm stated, “We are long bitcoin and short shares of MicroStrategy, a proxy for bitcoin which trades at an unjustifiable premium to the digital asset that drives its value.”
However, Michael Saylor defended MSTR in a conversation with Bloomberg, stating, “The ETFs are unlevered and they charge a fee. We provide you leverage, but we don’t charge a fee.” He also announced MicroStrategy’s rebranding as a “Bitcoin development company,” highlighting its significant holdings in the cryptocurrency.
Kerrisdale Capital hinted at its preference for BTC over MSTR stock due to its superior value proposition. The recent decline of MSTR’s stock growth, by 11.18% on the day, further reinforces Kerrisdale’s argument for direct BTC investment.
