Is it time to sell? In percentage terms, MicroStrategy has significantly outperformed its underlying asset, Bitcoin. It's concerning to watch Michael Saylor's FOMO (fear of missing out) into Bitcoin over the past year, as this could ultimately do more harm than good for Bitcoin. MicroStrategy's stock seems massively overvalued compared to its Bitcoin holdings. As the saying goes, "when the tide goes out, we see who is swimming naked."
Over the same period Bitcoin has gained 674%, while MicroStrategy has gained 2831%, making the situation quite clear. When comparing past bull runs, the percentage gains between Bitcoin and MicroStrategy have typically matched more closely, with both assets trending up together. So, what's different this time? Media exposure and FOMO.
Proceed with caution; this is starting to look like a bubble. Is it time to short?
Over the same period Bitcoin has gained 674%, while MicroStrategy has gained 2831%, making the situation quite clear. When comparing past bull runs, the percentage gains between Bitcoin and MicroStrategy have typically matched more closely, with both assets trending up together. So, what's different this time? Media exposure and FOMO.
Proceed with caution; this is starting to look like a bubble. Is it time to short?
Note
Added comment: If you have access to a Bitcoin ETF, I don’t see why you would choose to buy MSTR. The only reason you might buy a Bitcoin ETF instead of Bitcoin is to invest through products like pensions, ISAs, or 401(k)s, which do not allow you to buy and own Bitcoin directly. In countries that don’t offer a Bitcoin ETF, or for retail investors in the UK who cannot purchase Bitcoin due to FCA regulations, MSTR becomes a viable option. However, this is the only reason for buying it, which makes it a bubble. Once global Bitcoin ETFs/ETCs become available to all, MSTR's strategy will likely start to unravel athe share price will track at the price of BTC or maybe even lower because of the added risk. There is simply no reason to buy MSTR and pay a premium to own Bitcoin.
Trade active
MSTR now holds over $600,000 in Bitcoin (BTC). This recent purchase, combined with low trading volume and a weak dollar, clearly contributed to BTC reaching a new all-time high (ATH). However, with an average buy price of $70,000, the next bear market could be brutal and lead to significant paper losses for MSTR. This could be catastrophic for BTC if there are any reports of MSTR selling or if any unforeseen events involving MSTR occur. The bear market is approaching, and I believe it will arrive sooner rather than later based on my past experiences and market trends. Remember, low exchange (at 2.4 milion BTC as of today) volume can also drive prices down significantly. Adequate exchange liquidity provides stability, so trade carefully. Up like a stair case down like an elevator, it could happen very fast this time. Note
BTC GBP chart shows a double top pattern (89k 21st Jan and 90k 14th July) almost identical to past bull runs, that then proved to be the final ATH of that run before the bear market set in.Note
100 day EMA now acting as support, with 200 EMA day as resistance. Still needs to be confirmed on close. Positive momentum growing. Golden cross increasingly likely. 
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.