- MSTR and Bitcoin prices fell, signaling a broader market downturn.
- Kerrisdale Capital suggests BTC is a better investment than MicroStrategy stock.
The market appears to have been on the downside, with major coins and stocks experiencing a downturn. Data shows MicroStrategy (MSTR) plummeted 11.18% in just one day, while Bitcoin [BTC] fell by 0.95%.
However, when it comes to total value, the MSTR was $1,704, which represents an increase of 66.65% over the month. Bitcoin, on the other hand, cost $70,849, up 15.8% in one month.
Note about the same investment management company Kerrisdale Capital argued in its March 28 analyst note:
“The days when MicroStrategy stock provided a rare, unique way to access Bitcoin are long gone.”
This highlighted that MicroStrategy’s current valuation is excessively high compared to the value of BTC, which it holds as an asset.
Declining investor interest in MSTR
Following the approval of multiple spot BTC exchange-traded funds (ETFs) this year, Kerrisdale Capital believes the motivation for investors to trade MicroStrategy stock for Bitcoin exposure is waning.
The company noted:
“We are long bitcoin and short shares of MicroStrategy, a proxy for bitcoin that trades at an irresponsible premium to the digital assets that determine its value.”
It has also worked out,
“MicroStrategy shares have soared amid a recent rise in the price of bitcoin, but, as is often the case with crypto, things have gotten carried away.”
Saylor in defense of MSTR
However, Michael Saylor speaking to Bloomberg, MSTR defended and stated:
“The ETFs have no leverage and charge a fee. We offer you leverage, but we don’t charge any fees.”
Additionally, Saylor recently announced the rebranding of MicroStrategy as a “Bitcoin development company,” underscoring the success of its Bitcoin strategy and its significant holdings in the cryptocurrency.
Finally, Kerrisdale Capital hinted at its preference for BTC over MSTR stock due to its superior value proposition. The current decline in MSTR’s stock growth, of 11.18% on the day, further strengthens the Kerrisdale case for direct BTC investments.