MicroStrategy Shares Plunge 44%—And That’s Not Bitcoin’s Only Challenge for 2025

👇1-15) On October 7, we highlighted MicroStrategy’s breakout as its share price climbed above $177. However, in recent weeks, we have stressed the company’s overvaluation. Rather than serving as a true leveraged play on Bitcoin, investors have been significantly overpaying for indirect Bitcoin exposure.

Bitcoin (LHS) vs. MicroStrategy (RHS)

👇2-15) The stock’s underperformance, despite substantial Bitcoin acquisitions, indicates that investors are no longer willing to pay an implied price of $200,000 (or more) per Bitcoin through MicroStrategy when it can be purchased directly at a much lower cost. This suggests that stock investors are no longer willing to prop up MicroStrategy with an inflated NAV. The shift underscores a growing rationality among investors who previously bought into the unofficial narrative of MicroStrategy as "a leveraged Bitcoin play."

👇3-15) There’s no denying that BlackRock’s Larry Fink and MicroStrategy’s Michael Saylor have been pivotal figures in shaping the narrative of this bull market, driving significant interest in Bitcoin. While some investors may not be positioned to buy Bitcoin ETFs directly, many have turned to MicroStrategy as an alternative.

👇4-15) However, with MicroStrategy shares now down 44% from their peak and other companies adopting Bitcoin as a treasury asset strategy at a much smaller scale, the Bitcoin tailwind generated by this narrative appears to be losing steam. Combined with other factors - as we explain below, Bitcoin enters the New Year on a cautious note, with liquidity, trading volumes, and stablecoin issuance momentum playing critical roles in determining its direction.

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