grant-lachlan

MicroStategy's Bitcoin holdings as a percentage of market cap

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This is a chart of MicroStrategy's Bitcoin holdings as a fraction of the market cap of MSTR as a whole.

It is important to note that the chart is only valid for past late 2020 going into 2021. when MicroStrategy started to buy Bitcoin .

MicroStrategy own slightly more than 70,470 Bitcoin . For the sake of argument, let's say it's 70,470, which is what it was in December of 2020.

MSTR's market cap is 7.47B, and so there are approximately 9,270,990 shares, which is the result of the market cap divided by the price of the stock.

Therefore the current approximate Bitcoin holdings as a fraction of market cap is 70,470*BTCUSD/(9.267*10^6 * MSTR share price).

As of this posting, it is about 0.37

The Bitcoin holdings appear to be going down in recent weeks as a fraction of the total market cap, which is surprising, considering Bitcoin is soaring.

Obviously there is a lot of buy side pressure as a result of Bitcoin soaring, but this might not reflect the underlying market value.

Despite this, I am still bullish on MSTR , since it appears to be a way for institutions to implicitly invest in Bitcoin without holding it directly.

The underlying maths may suggest that MSTR is overpriced, but we need to consider other factors like this.

Comments

GOOD
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Hey. I’d love to understand this more, what exactly the 0.37 represents. Is that the proportionate value per share of the btc holding ?
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@rea100 this means that out of lets say the 1 share you buy, inside that share .37 of it is directly related to their company holding bit. when bit goes up their share price benefits and so do you. you “own” some BTC by having their shares in your portfolio
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rea100 ONtheSpot310
@ONtheSpot310, Yep, thats interesting. I think the fascinating thing is that the value of Microstrategy shares is going up faster than the value of BTC. If you have a look at their underlying business performance, there is no reason to explain this. Other than that this is an easy share for people to trade that want in with BTC. TSLA stocks didn't demonstrate the same shift though, after Musk dropped a 1.5bn in btc
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@rea100, Yes the share price is beating Bitcoin, my theory is that this is because it is the only share in some brokerages (before TSLA) that had BTC in it.

For instance, my broker doesn't have Greyscale GBTC, so everyone was pouring into MSTR.

Now that TSLA is on board it shouldn't change too much with regard to MSTR since TSLA's holdings of BTC relative to valuation is a lot lower than MSTR.

MSTR is a pretty risky play at the moment in the short term, long time I'm bullish on it.
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