- Strategy’s share has fallen by 40% and thus reflects Bitcoin’s battles, while the fears of investors increase the evaluation and the drains from the ETFs.
- The increase in Bitcoin lost momentum after the careful view of the US Federal Reserve, which led to massive ETF drains and new sales pressure.
Microstrategy, now renamed Strategy, was one of the strongest supporters of Bitcoin, but now doubts about the investment strategy are being loud. The company’s stock (MSTR) has fallen by 40 % since its high and reflects Bitcoin’s fight to keep over $ 90,000. The decline for investors, who once saw MSTR as a foreign bet on Bitcoin’s success, triggered concern.
https://twitter.com/10x_Research/status/1898273627457638647?ref_src=twsrc^tfw
Despite the strong decline, the Strategy share is still traded 60 % above its fair value, even if this gap is slowly reducing. Investors begin to ask whether the premium is justified, especially since Bitcoin experiences headwind through the uncertainty of the US Federal Reserve and the increasing ETF drains. The fear of overvaluation begins to burden the market mood.
In November 2024, when the Bitcoin briefly exceeded the $ 95,000 mark, the MSTR trading volume was an incredible $ 40 billion. However, the analysts of 10x Research suspect that institutional actors used this rally to get out and sold to small investors at high prices. Now many small investors are faced with losses, although Bitcoin stays near his level from the end of 2024.
Bitcoins 96% increase must face the reality check
Bitcoin rose by 96%between September and December 2024 because the dealers expected interest reductions through the Federal Reserve. But when the expected interest in December finally arrived in December, she came with a cautious view that signaled that future lowering could not come so easily. This dampened the enthusiasm on the cryptom market and led to Bitcoin going through a longer consolidation phase.
In addition to uncertainty, February 2025 has proven to be a brutal month for Bitcoin ETFs. The drains are skyrocketed and investors have deducted $ 1.3 billion – the worst monthly deduction in history. The sharp change in ETF demand intensifies Bitcoin’s struggle to keep itself over important price levels.
A large part of the ETF-driven demand was heated by Hedge Fund that use short-term arbitrage strategies. Now that the financing rates are falling, these businesses are undone, which triggers a new wave of sales pressure. The wider cryptom market feels the heat and the strategy share is no exception.
Microstrategy rating under pressure
Despite the criticism, Strategy has retained an aggressive BTC buying wave and has acquired Bitcoin worth $ 6 billion since December. However, 10x Research indicates a trendy trend: The Strategy share loses rapidly to surcharge compared to its net inventory value (NAV), an important indicator of the trust of investors.
At the top, the surcharge of the net inventory value (NAV) from Strategy was 3.4 times, but since then it has only dropped to 1.6 times, which means a fair value of $ 156 per share. This is in blatant contrast to the MSTR maximum in November 2024 at $ 453 per share when Bitcoin was traded at a similar level. Today MSTR has dropped to $ 287, which reflects the dwindling serve, which once fueled the increase of the stock.
In addition, the technical concerns are that Bitcoin has fallen under an ascending, spreading stretcher, a bearish signal that could push the prices down. If Bitcoin is not able to recapture the lost swing, analysts warn that it could test the average Bitcoin purchase price of $ 66,300-a scenario that could mean further problems for MSTR.
