‘Bitcoin a better investment than MicroStrategy’ – Is it really?

• MSTR and Bitcoin prices dropped, signaling a broader market downturn.
• Kerrisdale Capital suggests BTC is a better investment than MicroStrategy stock.

The market seems to have been on a lower end with major coins and stocks experiencing a downturn. Data shows that MicroStrategy (MSTR) plummeted by 11.18% in just one day whereas, Bitcoin [BTC] slipped by 0.95%. 

However, when it comes to the overall value, MSTR stood at $1,704, marking a 66.65% increase over the month. In contrast, Bitcoin was priced at $70,849, with a 15.8% one-month rise. 

Remarking on the same, investment management firm Kerrisdale Capital in its 28th March analyst note, argued, 

“The days when MicroStrategy shares represented a rare, unique way to gain access to Bitcoin are long over.”

This highlighted that the current valuation of MicroStrategy is excessively high compared to the value of BTC, which it holds as an asset. 

 Decreasing investor’s interest in MSTR

Following the approval of multiple spot BTC exchange-traded funds (ETFs) this year, Kerrisdale Capital believes there’s decreasing motivation for investors to trade MicroStrategy stocks for Bitcoin exposure. 

The firm noted, 

“We are long bitcoin and short shares of MicroStrategy, a proxy for bitcoin which trades at an unjustifiable premium to the digital asset that drives its value.”

It also elaborated, 

“Shares of MicroStrategy 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 in a conversation with Bloomberg defended MSTR and stated, 

“The ETFs are unlevered and they charge a fee. We provide you leverage, but we don’t charge a fee.”

Additionally, Saylor recently announced MicroStrategy’s rebranding as a “Bitcoin development company,” underscoring the success of its Bitcoin strategy and its significant holdings in the cryptocurrency.

At last, Kerrisdale Capital hinted at its favoritism for BTC over MSTR stock due to its superior value proposition. The present decline of MSTR’s stock growth, by 11.18% on the day, further reinforces the Kerrisdale argument for direct BTC investment.