MSTR loses correlation with BTC, despite being traded as a form of exposure to bitcoin.
There are different reasons that explain the decorrelation, according to The Kobeissi Letter.
Although the shares of MicroStrategy (MSTR), the company that owns the most bitcoin (BTC) in the world, opened 2025 higher, it has maintained a strong depreciation in the last month. On the other hand, this is not the case with digital currency.
The MSTR price registers a drop of almost 50% from its all-time high of $543 (USD) marked just over a month ago, specifically on November 21, 2024. Meanwhile, bitcoin, currently valued at USD 96,000, has registered an appreciation of 3% since then.
BTC even hit a new record price in mid-December, above $108,000, showing strong decorrelation with MicroStrategy stock. This happens despite the fact that the company bought as much bitcoin in the last month as it did in the last three years.
Furthermore, this is despite the fact that MicroStrategy entered the Nasdaq 100 (NDX) in December, which has simultaneously had a positive performance. This index, as reported by CriptoNoticias, compiles the main 100 shares of the Nasdaq stock market.
This decorrelation can be seen using the following graph:
For most of the last year, the correlation between MSTR and BTC was significantly strong. However, this began to change during the last month, when MicroStrategy took on more debt and suggested increasing the number of shares authorized from 330 million to 10,000 million.
“Through a series of convertible bond and debt issuances, MSTR took on tons of leverage,” explains the financial newsletter The Kobeissi Letter. So, “the markets seem to be worried about the possible approval of increasing the number of authorized shares,” he warns.
There are concerns about MicroStrategy’s debt and its number of shares
The specialist bulletin maintains that, To continue buying bitcoin, MicroStrategy needs to issue more debtwhich puts the value of their shares at stake. In his opinion, the company is in a lose-lose situation.
He elaborates that, if the plan to increase the number of shares is approved, the bears will say that it is a highly dilutive measure for existing shareholders. However, if it is not authorized, it clarifies that MicroStrategy will not be able to continue purchasing bitcoin with leverage.
Buying bitcoin is an integral part of MicroStrategy’s strategypromoted by its founder Michael Saylor. Therefore, the uncertainty about how this strategy will continue with the current outlook explains the fall in its shares. The company currently holds 445,400 BTC, which is now equivalent to more than $73 billion.
“On the one hand, investors will be upset about the dilution of the share count when the authorized share count is issued. On the other hand, if the plan is not approved, then MSTR will no longer be able to purchase bitcoin with debt. “This has put both Saylor and shareholders in a difficult situation.”
The Kobeissi Letter, specialist newsletter on global capital markets.
According to The Kobeissi Letter, the probability of the MSTR stock increase being approved is high. Therefore, “the markets are already discounting it,” he points out. He bases this on the fact that Saylor himself currently holds 46.8% of the voting power and, if only approximately 4% of the remaining shareholders support the plan, it will be approved.
