News View Non-AMP

Is MicroStrategy’s Premium Pricing Hurting Bitcoin Investors? Expert Reveals Smarter Options

Published by
Vignesh S G

MicroStrategy is often seen as a go-to option for gaining leveraged Bitcoin exposure, almost like a shortcut to owning BTC. But what if this popular choice isn’t all it’s cracked up to be?

Crypto expert Alex Kolicich offers a fresh perspective on why MSTR may not be the smartest route to take for Bitcoin exposure. Let’s dive into his insights and discover why some investors might want to reconsider their strategy.

MSTR: Trading at a Premium for Less Exposure

Currently, MSTR is priced at $386.42, reflecting a 10.96% increase in the past 30 days

However, Kolicich believes that MicroStrategy is overpriced as a Bitcoin proxy, trading at a 140% premium to its net asset value (NAV).

Bitcoin Exposure and Pricing Issues

MicroStrategy holds over 439,000 BTC, worth about $45.78 billion, or around 2.09% of Bitcoin’s total supply. This translates to an NAV of roughly $177.60 per share of Bitcoin. Despite this, Kolicich points out that for every $1 spent on MSTR, investors get less than $0.45 worth of Bitcoin exposure. In his view, buying MSTR provides less exposure to Bitcoin compared to simply purchasing BTC directly.

Convertible Debt: Shorting Volatility and Diluting Exposure

Kolicich also highlights the issue with MicroStrategy’s strategy of issuing convertible debt. This tactic effectively reduces volatility by selling a bond and a call option. However, unlike traditional call options, MicroStrategy doesn’t offer any leverage on the invested dollars.

Kolicich warns that when Bitcoin prices rise, the conversion of this debt dilutes the Bitcoin exposure for MSTR shareholders.

Double Taxation Risk

As a C-Corp, MicroStrategy’s structure is different from that of ETFs, and Kolicich points out a major drawback: the gains of a C-Corp are generally subject to double taxation — both corporate and personal taxes. This makes MSTR less tax-efficient compared to other investment options for Bitcoin exposure.

A Better Alternative: BITX

Kolicich suggests that products like BITX offer a more efficient and cost-effective way to gain Bitcoin exposure. BITX provides 2x leveraged Bitcoin exposure without trading at a premium to NAV, unlike MSTR.

Kolicich urges investors to carefully consider MSTR before investing. With its premium pricing, tax inefficiency, and limited Bitcoin exposure, alternatives like BITX could offer a smarter and more profitable way to invest in BTC.

Vignesh S G

Vignesh is a young journalist with a decade of experience. A proud alumnus of IIJNM, Bengaluru, he spent six years as a Sub-Editor for a leading business magazine, published from Kerala. His interest in futuristic technologies took him to a US-based software company specialising in Web3, Blockchain and AI. This stint inspired him to view the future of journalism through the lens of next generation technologies. Now, he covers the crypto scene for Coinpedia, uncovering a vibrant new world where technology and journalism converge.

Recent Posts

Time to Buy Ethereum? Whales Buy 15,563 ETH Amid Price Crash

Despite the bearish market sentiment, crypto whales are showing strong interest in Ethereum (ETH). Data…

April 4, 2025

Navigate the Markets with Confidence: OnEquity’s Comprehensive Trader Glossary

March 2025 – In the dynamic world of trading, a solid understanding of key terms…

April 4, 2025

What Will the Price of Pi Network (PI) Be If It Matches Ripple’s (XRP) Market Cap?

Even after Pi Network's listings on significant exchanges, its price swings and ongoing essential developments…

April 4, 2025

Cardano (ADA) Stumbles with 8% Drop, but Ruvi AI’s (RUVI) Token Takes Center Stage for Crypto Investors with 100% Bonus

The cryptocurrency market has once again found itself under the spotlight, with Cardano (ADA) seeing…

April 4, 2025

Is Pi Coin Headed to Zero Amid Rug Pull Fears?

Pi Coin has dropped to an all-time low of $0.51, marking an 83% drop since…

April 4, 2025

Grayscale Submitted S-1 Form for Solana ETF, But Staking Is Off the Table

Grayscale, the leading cryptocurrency asset manager, has officially submitted an S-1 form to the U.S.…

April 4, 2025