The stock price is no longer as high as the cryptocurrency price! "The largest Bitcoin treasury" MSTR becomes the focus, with the CEO firmly denying any sales, stating "we continue to hold coins."

The world's largest "Bitcoin treasury" company MicroStrategy (MSTR) is facing severe challenges, as its market value has fallen below the total value of its Bitcoin holdings.

On Friday, as the price of Bitcoin dropped below $95,000, hitting a six-month low, MicroStrategy's stock price has plummeted 32% over the past month. The company's market value has decreased to $59 billion, while the value of its Bitcoin holdings stands at $62.3 billion.

This means its relative net asset value multiple (mNAV) has fallen to about 0.95 times, marking the first time in the company's history that its market value is lower than its Bitcoin holdings.

The company's co-founder and executive chairman Michael Saylor refuted the sell-off speculation triggered by on-chain data in a media interview, stating:

We are buying Bitcoin and will announce the next batch of purchases on Monday morning. I think people will be surprised. In fact, we have been accelerating our purchases.

MicroStrategy's business model relies on issuing stock and convertible bonds at a premium to purchase Bitcoin, but the current market value discount means this financing mechanism has lost its effectiveness.

On-chain anomalies trigger sell-off speculation

Market speculation about MicroStrategy potentially selling Bitcoin is not unfounded.

According to data from crypto intelligence platform Arkham Analytics, there have been changes in MicroStrategy's on-chain funds, raising concerns among some market observers.

However, Arkham added that these movements may simply indicate that MicroStrategy is using Coinbase as its new custodian, rather than selling.

Additionally, on the prediction market Myriad, traders' odds of MicroStrategy selling Bitcoin in 2025 surged to 14%.

In response to the rumors, Saylor clarified in the media interview that the only sell-off behavior he has observed comes from some "OG holders" (early holders) who chose to take profits after Bitcoin reached the $100,000 mark, but this is unrelated to the company's actions.

He emphasized that MicroStrategy's strategy has always been "to keep buying," only pausing to announce new purchases at the end of each fiscal quarter.

TD Cowen analyst Lance Vitanza noted that theoretically, the company may need to sell Bitcoin to repay maturing debt, but the company's convertible bonds do not mature until 2028, making it "extremely unlikely" that MicroStrategy will actively sell Bitcoin.

Financing mechanism under test

The inversion of MicroStrategy's stock price relative to the value of its Bitcoin reserves is the core focus of the current market.

MicroStrategy purchases Bitcoin by issuing common stock, leveraging the premium of its stock price relative to the value of its Bitcoin holdings for financing. However, the current mNAV of 0.95 times indicates that this mechanism has become ineffective The company uses diversified financing tools to fund Bitcoin purchases, including convertible bonds and preferred shares with dividend payments.

As of Friday, MicroStrategy has raised $8.2 billion through convertible bonds, with preferred shares totaling $7.6 billion. Last week, the company announced its first issuance of euro-denominated preferred shares in Luxembourg, expected to generate $715 million in dividends.

In the face of market skepticism, Saylor expressed firm confidence in a media interview. He stated:

Even if the price of Bitcoin drops by 80%, MicroStrategy's balance sheet remains stable, and we will still have ample collateral to repay our debts.

He is "quite satisfied" with Bitcoin's current price level and described the recent decline in Bitcoin as laying the groundwork for its rebound. However, he added that it is currently difficult to predict Bitcoin's price trend by the end of the year.