One article understands the market value of micro-strategy/bitcoin premium rate plummeted to 1.6 in three months

Data shows that listed company MicroStrategy (formerly known as Strategy) has held 478,740 bitcoins, with a total cost of approximately US$31.166 billion and currently worth approximately US$41.871 billion. The company has continued to increase its holdings of Bitcoin over the past year.

MicroStrategy Bitcoin holdings

However, the recent fluctuation and decline of Bitcoin prices, MicroStrategy's stock price has also fallen, currently at $250.51, a month-on-month decline of 28%, and its market value shrank to $63.2 billion.

Analysts: Market value premium dropped to 1.6, increase in positions may be blocked

Cryptocurrency analyst Miles Deutscher pointed out that MicroStrategy's market capitalization premium (relative to its Bitcoin holdings) has dropped from 3.4 in November to the current 1.6. This means that it will be more difficult for MicroStrategy to raise funds to buy Bitcoin by issuing bonds or issuing additional shares. The lower premium rate indicates that investors' expectations for Bitcoin have become more conservative, and MicroStrategy's future share growth may slow down.

What is market value premium?

Market value premium refers to the difference between the company's market value and its intrinsic value. After MicroStrategy transformed into a company that mainly holds Bitcoin, its market value depends largely on the value of Bitcoin. The high premium reflects investors' optimistic expectations for Bitcoin, but the current crypto market is sluggish, resulting in a shrinking premium.

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