U.Today – In a noteworthy development, shares of business intelligence company MicroStrategy (MSTR) continue to rise relative to the price of (BTC), pushing up the premium over the value of its BTC holdings at its highest level in more than three years.
Notably, since the launch of the Bitcoin ETFs in January, MicroStrategy shares have risen more than 240%, setting a new record on October 8. That's about eight times the performance of Bitcoin, which has fallen 16% since setting its record. almost $74,000 in mid-March.
This development, as Bitcoin lags behind MicroStrategy's performance, has caught the market's attention, sparking discussions among traders and market observers.
In a recent X trade, legendary trader Peter Brandt shared his thoughts on MSTR's recent price action. An X user asked Brandt “what do you think about MSTR? It has recently made a breakthrough without the help of Bitcoin.”
Brandt responded and advised caution: “Just don't follow it. The chart looks volatile and will trend with Bitcoin.”
Despite the recent disconnect between MSTR price and Bitcoin performance, Brandt's view is that the two are still closely linked. He believes MicroStrategy will eventually trend again alongside Bitcoin, meaning the stock's long-term performance depends largely on Bitcoin's trajectory.
At the time of writing, Bitcoin (BTC) was up 3.11% in the last 24 hours to $62,729.
MicroStrategy premium increases
MicroStrategy's premium has increased, and MSTR stock rose 11% to a 25-year high, far outpacing Bitcoin's 3% gain. MicroStrategy, a former enterprise software company that now calls itself a Bitcoin development company, holds 252,220 BTC worth nearly $9.9 billion at a price of nearly $39,266 per Bitcoin as of September 20, 2024.
MicroStrategy's net asset value (NAV) premium has reached 2.5 times its Bitcoin holdings, 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 price of Bitcoin gives you 0.0030. This is the highest ratio since MicroStrategy began adopting Bitcoin in August 2020. MicroStrategy raised its “Bitcoin Yield” KPI to 5.1% from 4.4% in Q2 2024.
This article was originally published on U.Today.
