Bitcoin Magazine
Strategy Stock MSTR Offers Bitcoin Exposure At 18% Discount
I’ve been vocal about accumulating Bitcoin aggressively at current levels. Now I’m starting to look seriously at Strategy too. The same kind of confluence that flagged Bitcoin as a sizeable accumulation opportunity is appearing on MSTR, and in some cases, the readings are even more extreme.
This week at a glance:
The RSI has only been lower on a handful of occasions since Strategy adopted a Bitcoin standard.
The Mayer Multiple for MSTR has just reached the lower percentiles.
The BTC vs MSTR ratio is close to entering a zone that has historically preceded sustained MSTR outperformance.
At the previous Bitcoin all-time high with a 1x net asset value premium, the fair value of MSTR shares would be over $300.
Discount
Strategy currently holds approximately 845,000 BTC with an Average Cost Basis in the mid-$70,000s. That means, at current Bitcoin prices, they’re sitting at a pretty massive loss on their holdings.
Figure 1: Strategy’s Average BTC Cost Basis and other key metrics.
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This has coincided with the NAV dropping even deeper beneath 1.00x; with MSTR’s market cap currently sitting approximately 18% below the USD value of its Bitcoin holdings. In other words, buying MSTR at current prices is the equivalent of buying $1 of Bitcoin for $0.82.
Support
The 200-week moving average is usually pretty notable support for assets, especially those that typically trend to the upside. Strategy’s share price is currently sitting right on this level, the same level that has previously marked significant accumulation zones.
Figure 2: Strategy’s share price tests the 200-week moving average.
A sustained hold and reclaim of this level, combined with Bitcoin showing any upward momentum, historically sets up the conditions for meaningful MSTR recovery. The level is being tested. Whether it holds will be one of the key signals to watch over the coming weeks.
RSI
Since Strategy adopted a Bitcoin standard, the RSI for MSTR has only been lower on a handful of prior occasions, both during previous Bitcoin bear market cycle lows, when the share price was in the low teens. The current reading isn’t quite at those depths, but it’s approaching them, and the direction of travel is continuing downward.
Figure 3: MSTR’s RSI drops beneath 25. Historically, such levels have preceded price appreciation.
The Mayer Multiple, simply the ratio between MSTR’s closing price and its 200-day moving average, recently registered a reading where 99.2% of all prior data points were higher. That’s a historically extreme level of underperformance relative to its own moving average, and it’s occurred at broadly the same time as the RSI signal. Giving two independent momentum indicators, both flashing readings only seen at the most significant cycle lows in MSTR’s history.
MSTR Or BTC?
The ratio betw