For the first time in its history, MicroStrategy (MSTR) is watching its share price premium detach from Bitcoin’s performance like a toddler wandering off in a grocery store. Oops. 🛒
These changes are happening while Bitcoin proxy plays grow faster than my regret after ordering takeout instead of cooking. MicroStrategy-now rebranded as “Strategy” because apparently one syllable was too many-remains the heavyweight champ of corporate Bitcoin hoarding. But for how long? 🏆📉
Premium Breaks Free, Like a Squirmy Cat 🐱✨
The divergence raises questions about whether Michael Saylor’s financial model is more house of cards than fortress. 🃏 Are new players in the Digital Asset Treasury (DAT) market eating MicroStrategy’s lunch-or worse, its Bitcoin stash? 🍕
In hindsight, MicroStrategy’s ability to accumulate Bitcoin at scale has always relied on a glorified magic trick. When its stock trades at a premium to net asset value (mNAV), it issues shares, raises cash, and buys BTC like a kid with a gift card at a candy store. 🍬 This financial wizardry has been Saylor’s bread and butter since 2020. Or should I say, his Bitcoin and butter?
But according to researcher Joseph Ayoub, this party might be over. The emergence of multiple DATs is weakening that flywheel faster than you can say “FOMO.” 🎡
“For the first time in its history, it looks like the discount strongly correlated with Bitcoin’s price has diverged… Perhaps as a function of other DATs launching in the market… I don’t see this premium returning meaningfully again,” Ayoub wrote. Translation: It’s not coming back, folks. Move on. 🚪
If Ayoub’s right, this would mark a turning point so decisive even Saylor’s Twitter memes won’t save him. MicroStrategy’s ability to fund new Bitcoin purchases through equity issuance may now be permanently impaired. Better start practicing those sad trombone noises. 🎺😭
DATs, for the uninitiated, are companies that sell shares to buy digital assets. Since 2020, they’ve exploded from roughly $10 billion in NAV to over $100 billion. Meanwhile, Bitcoin ETFs account for around $150 billion. DATs appeal to investors because they offer equity exposure to crypto assets, often at significant premiums. Sounds fancy, but let’s call them what they really are: modern closed-end funds dressed up for prom night. 💃🕺
Ayoub describes them as such, noting that unlike ETFs, most DATs can’t redeem shares for underlying assets. That leaves valuation tied to market sentiment rather than direct redemption mechanisms. Which sounds great until everyone panics and sells simultaneously. Remember Grayscale Bitcoin Trust (GBTC)? Yeah, massive premiums turned into a 50% discount during the 2022 bear market. Ouch. 📉🔥
“Excellent post from @bewaterltd compares the DATs (Bitcoin access vehicles I call them) with the investment trust mania of the 1920s,” tweeted Nic Carter of Castle Island Ventures. “Many, many similarities.” So basically, we’re all reliving history, but this time with more emojis. 🔄😂
Risks Mount Faster Than My Credit Card Debt 📈💳
The premium’s decline comes as Saylor faces mounting scrutiny over MicroStrategy’s concentrated exposure to Bitcoin. Some investors think the firm’s recent update makes holding MSTR feel less like owning stock and more like riding a rollercoaster designed by Elon Musk. 🎢⚡
If MSTR trades persistently at a discount, several consequences follow. Shareholder lawsuits could demand redemptions closer to NAV. Regulators might step in, recalling precedents like Tonopah Mining in the 1940s or the GBTC saga in 2021. Either way, stricter rules or forced structural changes loom ominously on the horizon. Cue ominous music. 🎶💀
Against this backdrop, Ayoub warns that equity-financed Bitcoin treasuries have a saturation point. Spoiler alert: We’re approaching it. 🧳
“After there’s enough supply to absorb artificial & immature DAT demand, the unwind will begin… That is not too distant a future,” he wrote. In other words, buckle up. It’s gonna get bumpy. 🚗💨
Data shows MicroStrategy holds nearly 630,000 BTC with manageable debt levels. Impressive, sure-but the decoupling of its premium suggests its once-virtuous cycle is breaking down like an old bicycle chain. 🚲💔
If true, the company that turned corporate Bitcoin strategy into financial alchemy may face its toughest test yet-not from a bear market, but from the erosion of its own unique advantage. Irony, thy name is Saylor. 🦁👑
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2025-08-20 09:36