U.Today – Shares of business intelligence company MicroStrategy (MSTR) continue to rise relative to its (BTC) price, pushing the premium to the value of its BTC holdings to the highest level in over three years.
Notably, since the launch of Bitcoin ETFs in January, MicroStrategy shares have surged over 240%, setting a fresh record on October 8. That’s about eight times the performance of Bitcoin, which has fallen 16% since setting a record in mid-March to almost $74,000.
This development, as Bitcoin lags behind MicroStrategy’s performance, has caught the market’s attention, sparking discussions among traders and market watchers.
During the recent X Stock Exchange, legendary trader Peter Brandt shared his thoughts on MSTR’s recent price action. User X asked Brandt “what do you think about MSTR? Recently, it has made enormous progress without the help of Bitcoin.”
Brandt responded by advocating caution: “Just don’t follow him. The chart looks volatile and will trend for Bitcoin.”
Despite the recent disconnect between MSTR’s price and Bitcoin’s performance, Brandt believes the two factors are still closely related. He believes MicroStrategy will eventually re-trend along with Bitcoin, which means the stock’s long-term performance is highly dependent on Bitcoin’s trajectory.
At the time of writing, Bitcoin (BTC) is up 3.11% in the last 24 hours to $62,729.
MicroStrategy premium is increasing
MicroStrategy’s premium surged, with MSTR shares rising 11% to a 25-year high, well outpacing Bitcoin’s 3% gain. MicroStrategy, a former business software company that now calls itself a Bitcoin development company, holds 252,220 BTC worth almost $9.9 billion at a price of almost $39,266 per Bitcoin as of September 20, 2024.
The MicroStrategy platform’s net asset value (NAV) premium has reached 2.5 times Bitcoin asset value, the highest since February 2021.
Not only is the NAV multiple at its highest level in years, but dividing the MicroStrategy share price by the Bitcoin price gives 0.0030. This is the highest rate since MicroStrategy began implementing Bitcoin in August 2020. MicroStrategy raised its “Bitcoin Yield” KPI to 5.1% from 4.4% in Q2 2024.
