Bitcoin or MicroStrategy stock? Analysts say MSTR is trading at an “unjustified premium” to BTC

MicroStrategy shares are on the rise and are reaching new highs Bitcoin Voltage spikes. Bitcoin Development Company (MSTR: NASDAQ) stock is now $1,746 per share, up 615% year-to-date.

However, the price has now been “carried along” and a price decline is expected, investment management firm Kerrisdale Capital said in a new report. Titled “Know when to use HODL, know when to use FODL,” the company said MSTR’s price compared to Bitcoin is no longer justified.

“We are long Bitcoin and short shares of MicroStrategy, a proxy for Bitcoin that trades at an unfair premium to the digital asset that determines its value,” the report said. “Long gone are the days when MicroStrategy shares represented a rare, unique opportunity to gain access to Bitcoin.”

The software company started aggressively bought Bitcoin back in 2020. The company is now the largest corporate owner of the cryptocurrency with 214,246 coins – now worth over $15 billion.

Its co-founder and chairman Michael Saylor has said repeatedly that purchasing MSTR shares provides investors with safe and reliable access to Bitcoin compared to owning the digital coins directly or investing in newly approved ETFs (exchange-traded funds).

He argues that MSTR is a good deal because of the lack of management fees. Kerrisdale's report argued that this pitch was not fair.

The US Securities and Exchange Commission. approved in January a series of spot Bitcoin ETFs, giving traditional investors the opportunity to buy stocks that track the price of the cryptocurrency and are traded on a regulated exchange.

And the products were enormously successful – with record inflows to the funds – and some have very low fees.

“Bitcoin is now easily available through brokers, crypto exchanges and, more recently, low-cost ETPs and ETFs,” it says.

It added that buying Bitcoin was a better choice. “Shareholder value creation has been largely driven by simple Bitcoin price increases – just as full ownership of Bitcoin would be,” it said.

The Price of Bitcoin is up nearly 3% today, trading for $70,784 per coin, according to CoinGecko. It hit a new all-time high of nearly $74,000 earlier this month.

MSTR is now down almost 10% today.

Edited by Ryan Ozawa.

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