MicroStrategy’s (MSTR) stock has entered a historic low-volatility phase, raising questions about its continued attractiveness to traders and institutional investors who previously favored the stock as a high-beta proxy for Bitcoin.
Volatility Plunges to Pre-2020 Levels
MSTR’s 10-day realized volatility has dropped to its lowest point since the firm began acquiring Bitcoin in 2020, according to Jeff Park of Bitwise Asset Management. Simultaneously, implied volatility (IV)—a forward-looking measure derived from options markets—has sunk to 48.33%, near all-time lows.
For context, MSTR’s IV peaked at 225% in November 2024 during a surge following Trump’s election victory, when Bitcoin crossed $95,000 and MSTR jumped from $350 to $525. Today, MSTR trades at approximately $367, while Bitcoin hovers near $105,000.
Slower BTC Accumulation Fuels Sentiment Shift
MicroStrategy added just 245 BTC last week, its smallest weekly purchase since March, bringing total holdings to 592,345 BTC. This slowdown comes as investors begin rotating into newer public firms pursuing Bitcoin treasury strategies.
One example is Canada’s LQWD Technologies Corp, which has seen a three-fold rise in share price recently due to its Bitcoin-focused strategy.
Moreover, MSTR hasn’t tapped its at-the-market equity offering for four straight weeks, suggesting reduced urgency or appetite for aggressive expansion.
Valuation Premium Under Scrutiny
The firm currently trades at a 1.83x multiple to its Bitcoin-backed net asset value (mNAV). While this premium once attracted speculative flows, compressed volatility may erode the speculative edge, particularly for options traders.
Michael Saylor’s narrative has long championed volatility as a feature—not a bug. But without large swings, MSTR could lose its role as a leverage play on BTC.
Strategic Pivot or Decline in Relevance?
To counter waning enthusiasm, MicroStrategy is exploring alternative financing tools like its perpetual preferred stocks STRK and STRF. While these offer potential fixed-income streams, they lack the appeal of high-octane speculative plays.
Conclusion
With both realized and implied volatility hitting historic lows, MicroStrategy’s reputation as a high-beta BTC play may be fading. Unless volatility returns—or BTC itself re-enters price discovery—investors may increasingly look elsewhere for upside in the crypto-equity space.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.