After the election, the price of BTC surged to almost $100,000, reaching an all-time high. Meanwhile, Michael Saylor’s MicroStrategy (MSTR) also experienced a rally, surpassing $500 post-election. However, last week, MSTR faced a significant 22% drop due to short selling concerns about the company’s valuation.
MSTR’s stock price is closely tied to the price of BTC, as the company has heavily invested in Bitcoin. With 386,700 BTC worth nearly $22 billion, representing around 99.5% of its balance sheet, MSTR has taken on substantial leverage to acquire these assets. This high leverage has contributed to the stock’s volatility, with a correlation of about 65% to BTC.
Despite the strong correlation, MSTR is not an ideal proxy for BTC due to its leverage and volatility. Investors looking for exposure to BTC may consider BTC ETFs or perpetual contracts instead. While MSTR’s rally before the recent drop pushed the z-score to nearly four standard deviations, historical data suggests limited mean-reverting opportunities.
MSTR has the option to sell additional equity, potentially widening the ratio between its valuation and BTC. This indicates that MSTR may be overvalued in comparison to BTC, and the spread between the two assets could narrow further in the future.
In conclusion, while MSTR offers exposure to BTC through its holdings, the high leverage and volatility associated with the stock make it a risky investment. Investors seeking to benefit from the rise of BTC may find more suitable options in BTC ETFs or other instruments. Monitoring the correlation between MSTR and BTC can provide insights into potential trading opportunities, but caution is advised due to the company’s significant leverage. The world of online shopping has been growing rapidly over the past few years, with more and more people opting to make their purchases from the comfort of their own homes. This trend has only been accelerated by the global pandemic, which has forced many brick-and-mortar stores to close their doors temporarily or even permanently.
One of the biggest advantages of online shopping is the convenience it offers. Gone are the days of having to drive to the mall, find a parking spot, and navigate through crowded stores to find what you’re looking for. With just a few clicks, you can browse through thousands of products and have them delivered right to your doorstep in a matter of days.
Another benefit of online shopping is the ability to compare prices and find the best deals. With so many retailers vying for your business, you can easily find discounts, sales, and promotions that you might not have known about otherwise. This can save you a lot of money in the long run, especially if you’re a savvy shopper who knows how to hunt for bargains.
Online shopping also offers a wider selection of products than most physical stores. No matter what you’re looking for, chances are you’ll be able to find it online. From clothing and electronics to groceries and household items, the possibilities are endless. And if a particular item is out of stock at one retailer, you can easily find it at another with just a few clicks.
Of course, there are some downsides to online shopping as well. One of the biggest concerns for many people is the risk of fraud and identity theft. With so much personal information being shared online, it’s important to be cautious and only shop from reputable websites that use secure payment methods.
Another potential drawback is the inability to see or try on products before making a purchase. While many online retailers offer detailed product descriptions and photos, it can still be tricky to gauge the quality and fit of an item without seeing it in person. However, most online stores have generous return policies that allow you to send back items that don’t meet your expectations.
Overall, online shopping has revolutionized the way we shop and has made it easier than ever to find and purchase the products we need. With its convenience, wide selection, and potential for savings, it’s no wonder why so many people are choosing to shop online. As long as you take the necessary precautions to protect your personal information and shop from reputable retailers, online shopping can be a safe and enjoyable experience.