He argues that companies with large Bitcoin treasuries are indicative of a later stage in the Bitcoin market cycle. For Strategy’s stock to defy this trend, Bitcoin would need to break free from its historical pattern of boom-and-bust cycles and sustain a prolonged bull run.<\/p>\n
Historically, there have been times when Strategy\u2019s market capitalization exceeded its actual Bitcoin holdings by more than double. Currently, with a market cap-to-Bitcoin ratio of 1.34-to-1, Gal\u00e1 suggests that while investors shouldn’t increase short positions, they should also refrain from taking long positions.<\/p>\n
He believes that the market cap multiple is likely to decline, driven in part by skepticism in the credit markets regarding the debt Strategy has issued to finance its Bitcoin acquisitions.<\/p>\n
Crypto Stocks Suffer Setbacks<\/h2>\n
Gal\u00e1 also expressed doubt that credit rating agencies will be inclined to assign investment-grade ratings to Strategy’s treasury strategy, especially in the near term. This skepticism stems from the fact that the company’s profits are largely unrealized gains from its Bitcoin holdings.\u00a0<\/p>\n
Securing an investment-grade rating could potentially allow Strategy to issue and repay its debt under more favorable terms, but this would require Bitcoin to be perceived as a more stable digital asset, akin to gold.<\/p>\n
After reaching a new record price just above $124,000, the market\u2019s leading cryptocurrency has seen its valuation drop 9% from all-time high levels currently attempting to consolidate between $112,000 and $113,000.\u00a0<\/p>\n
Beyond Strategy, crypto stocks have also seen their valuations drop. On Thursday, shares of USDC issuer Circle (CRLC) dropped 4% after the initial excitement following the firm\u2019s initial public offering (IPO).<\/p>\n
US-based cryptocurrency exchange Coinbase (COIN) saw its shares drop toward the key $300 support, meaning a 2.5% decline compared to Wednesday\u2019s trading session.\u00a0<\/p>\n
<\/p>\n
Featured image from DALL-E, chart from TradingView.com\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
Strategy (previously MicroStrategy), the software firm co-founded by Bitcoin (BTC)\u00a0 bull Michael Saylor has seen its stock, MSTR, take a considerable hit plummeting by nearly 20% since last month, in line with the broader market correction.\u00a0 This downward trend is expected to persist, according to Gus Gal\u00e1, an analyst at Monness, Crespi, Hardt, who recently…<\/p>\n","protected":false},"author":1,"featured_media":12051,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[10,12,15,26,4773,17,337,981,1548,1231,2449,4394,4774],"class_list":["post-12050","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency-market-news","tag-bitcoin","tag-btc","tag-crypto-market","tag-crypto-news","tag-crypto-stocks","tag-cryptocurrency-market-news","tag-microstrategy","tag-microstrategy-news","tag-microstrategy-stock-price","tag-mstr","tag-strategy","tag-strategy-news","tag-strategy-stock"],"_links":{"self":[{"href":"https:\/\/coinsrise.net\/blog\/wp-json\/wp\/v2\/posts\/12050","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinsrise.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinsrise.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinsrise.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/coinsrise.net\/blog\/wp-json\/wp\/v2\/comments?post=12050"}],"version-history":[{"count":0,"href":"https:\/\/coinsrise.net\/blog\/wp-json\/wp\/v2\/posts\/12050\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinsrise.net\/blog\/wp-json\/wp\/v2\/media\/12051"}],"wp:attachment":[{"href":"https:\/\/coinsrise.net\/blog\/wp-json\/wp\/v2\/media?parent=12050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinsrise.net\/blog\/wp-json\/wp\/v2\/categories?post=12050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinsrise.net\/blog\/wp-json\/wp\/v2\/tags?post=12050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}