Share In Strategy (MSTR), the publicly traded company that holds the largest Bitcoin (BTC) assets, is trading below the net asset value of its holdings in the digital currency.
last month, The stock price fell 26%, bringing the cumulative decline to 43% over the past six months.. As seen in the graph, it is currently trading around $224 compared to the $316 mark it marked just a month ago.
This correction is more pronounced than the correction in Bitcoin itself, which reached an all-time high of over $126,000 at the end of October, as reported by CriptoNoticias, and is currently at about $103,000, representing a decline of about 18%.
As a result, Strategy’s standard net asset value (mNAV) multiple fell to 0.97. This metric measures the relationship between a company’s market capitalization and the market value of Bitcoin (using underlying shares in circulation and no future dilution by convertibles). An mNAV of less than 1 means that the market value of the entire company is less than the value of its net Bitcoin reserves..
From a bullish perspective, stocks trading at a discount to Bitcoin’s value can be seen as attractive entry opportunities for investors who have confidence in their long-term thesis and want exposure to Bitcoin.
However, a more skeptical view shows that mNAV decreases below 1. It could be a sign that investors are starting to question the sustainability of the strategy.. If the company loses its ability to continue raising capital on favorable terms, the discount could become structural and deepen over time.
Analyst Daniel Mbudi said if Bitcoin corrects below Strategy’s average purchase price of $75,000, “the worst could be yet to come.” “The decline could intensify and we could be forced to sell Bitcoin to cover our expenses, which could put many people, not just MSTR, at risk.”
Despite the stock market downturn, Strategy hasn’t stopped its accumulation strategy. The last known purchase was for 487 BTC, approximately $50 million, but the pace of acquisitions has decreased significantly compared to previous periods.
