MicroStrategy and Bitcoin: Understanding the Stock Performance
Since August 2020, MicroStrategy ( $MicroStrategy(MSTR)$) has become a major player in the cryptocurrency market after its first big Bitcoin purchase. This move has tied its stock performance closely to Bitcoin’s price. When Bitcoin prices rise, MicroStrategy’s stock usually goes up, benefiting from the increased value of its Bitcoin holdings. Conversely, when Bitcoin prices fall, the company’s stock often drops, reflecting the reduced value of its digital assets.
Correlation Between MicroStrategy and Bitcoin
Recent Trends and Analysis
As of mid-2024, MicroStrategy’s stock has shown significant growth, often rising more sharply than Bitcoin’s price. This is clear from the chart, where MicroStrategy’s stock (blue line) has surged more compared to Bitcoin (orange line).
Based on my analysis, I believe MicroStrategy is currently overpriced, which is why I maintain a bearish [Put] view on the stock, even though I am still holding onto it.
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