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MicroStrategy Cracks as Bitcoin Tests $90K—Is a Deeper Drop Coming?

Bitcoin breaks key technical level.

Author

Markus Thielen
February 25, 2025

👇1-16) During my time in derivatives trading at Goldman Sachs and Morgan Stanley, we observed structural demand for yield products in Asia, where interest rates tend to be relatively low. These products rely heavily on retail investors selling options at cheap volatility or buying options at inflated volatility, often paying a premium compared to where institutional traders price them. Similarly, many investors view MicroStrategy (MSTR) as a leveraged Bitcoin call option, but fail to recognize that they are overpaying significantly—at present, the stock is trading 60% above its fair value (see February 24 report).

Value Traded in MSTR Shares (LHS, $ billions) vs. MicroStrategy (RHS)

👇2-16) Given that MicroStrategy traded $40 billion in volume on November 21, 2024, when its shares peaked, it's likely that savvy investors offloaded (some of) their positions to retail buyers, who are now sitting on significant losses—despite Bitcoin's price remaining flat over the same period. During that period, MicroStrategy acquired $10 billion worth of Bitcoin.

👇3-16) Bitcoin has broken the critical $95,000 level, a move that could have significant implications in the coming weeks. With several key factors at play, this is not the time for complacency—market dynamics are shifting, and traders should remain vigilant.

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