One of the hottest Bitcoin Trading declines in 2024 with the arrival of the new year.

As of Thursday, MicroStrategy's stock price was down 45% from its peak in November, falling to $300 from a record price of $543 about six weeks ago.

Virginia-based software company Tysons has had huge success with Bitcoin in the past year, purchasing billions of dollars worth of the cryptocurrency using... justice and religion. Company Monday topped Her stash of 446,400 BTC, worth $43 billion, with $200 million worth of BTC purchased.

Since MicroStrategy's stock price reached its peak, the Bitcoin buying giant has purchased BTC five different times, yet each purchase has become smaller. After buying $5.4 billion worth of Bitcoin on November 25, for example, Monday's purchase represented its lightest allocation since August. It turned out that this was not enough to stop the stock's long decline.

MicroStrategy has cemented its position as the world's largest bitcoin holder — adopting the asset as a new way to shore up its balance sheet in 2020 — but the company has also captured attention on Wall Street recently as a risky bet on bitcoin.

By issuing $7.3 billion worth of convertible bonds, a form of debt that can later be converted into equity, the company was able to purchase more bitcoin than it could have otherwise. Meanwhile, the company's valuation has ballooned beyond its $43 billion Bitcoin holdings, with a current market capitalization of $73.2 billion.

Investors have been paying a premium for exposure to Bitcoin when it comes to MicroStrategy shares, which currently trade at 1.6x its Bitcoin holdings according to MSTR tracker. While investors can gain pure exposure to Bitcoin through products like spot ETFs or simply by purchasing the asset itself, this premium stood at 3.4x in November.

MicroStrategy's stock price has risen 334% over the past year, outpacing Bitcoin's 116% rise over the same period. This is what prompted Bernstein analysts to say that MicroStrategy is “Building a case“For its premiums, along with the proven ability to increase its Bitcoin holdings per share.

With an implied price of $200,000 per bitcoin for MicroStrategy shares, it appears that “equity investors are no longer willing to support MicroStrategy at an inflated share price” compared to its Bitcoin holdings, 10X Research wrote in a note on Thursday.

“This shift underscores the growing rationality among investors who previously bought into the informal narrative of MicroStrategy as a ‘leveraged Bitcoin play,’” 10X Research added.

Leveraged investment products, which enable traders to gain greater market exposure to an asset or benchmark, already exist. But with MicroStrategy's valuation rising in the past year, some have deemed the company's value relative to its Bitcoin holdings unsustainable.

In November, impact investing firm Citron Research disclosed a short position in MicroStrategy, while maintaining a long position in Bitcoin. Citron, which previously backed MicroStrategy, said the company has become “Completely separate“One of the basics of Bitcoin.

Despite rumblings about MicroStrategy's premium, the company was He added to the Nasdaq 100 last month, finding a new place within a stock market index that tracks big technology companies. Analysts said that this step may lead to... Billions of dollars Flow into MicroStrategy stock.

MicroStrategy's inclusion in the index was praised by Bitcoin enthusiasts, who saw the price of the asset summit At $108,000 a few days later. Since then, Bitcoin's price has fallen by 10%, while MicroStrategy's stock price has fallen even further.

Modified by Andrew Hayward