Pavlos D
Founder of Elliott Waves Trades, Checklist-Based Trading
Strategy is a bitcoin beta trade stacked on an mNAV premium, and both are deflating at once, so leverage is cutting both ways in its 80% drop from all-time highs. Turning bleak into done needs a weekly base with a higher low and a premium to NAV that stops compressing; until then the drawdown may be only a pause inside the downtrend. x.com
Strategy's premium is the whole engine of its model, and it is compressing in real time. Per @AdamBLiv, Strategy added about 53,000 bitcoin in three weeks, lifting its stack 7%, while its shares rose only 0.7%. x.com
Strategy needs a solid bid to preserve the premium that funds its bitcoin purchases. MSCI's new rules could eject it from global indexes and force passive selling; JPMorgan estimates $2.8 billion in Strategy share sales if that happens, or up to $8.8 billion if others follow. Without the premium, it cannot raise funds to buy bitcoin. Watch whether the rules bite on November 30. x.com
Strategy's accretive Bitcoin accumulation has raised net backing per share, lowering the premium needed to revisit its $543 intraday high. At $98,000 Bitcoin, backing rose from $127 to $160 since November 2024, cutting the required net mNAV from 4.3x to 3.4x. A 2.5x premium at $200,000-$250,000 Bitcoin would imply roughly $896-$1,131; 2.5x is plausible at peak euphoria, not expected at $126,000. Premiums depend on Bitcoin momentum and sentiment, which Strategy cannot control. x.com x.com
Strategy missing EPS by 1,000% is not bullish, and a lower low looks like the natural next direction. Support sits at $68, then the 200-month moving average at $50. x.com
Strategy's mNAV has dropped below 1, which will make it much harder to issue new shares. The company is valued at just $29.5 billion despite holding over $51 billion of bitcoin, as investors who once treated it like a leveraged bitcoin ETF, issuing shares to buy more bitcoin at a premium, now doubt the whole structure amid serious dilution. x.com x.com
Bitcoin and Strategy offer an unparalleled and underappreciated setup now that the issue around Strategy's STRC preferred is largely resolved. x.com
The loss of forced ETF buying increases the likelihood Strategy will trade at a discount to the value of its bitcoin holdings. WatcherGuru reports MSCI plans to remove Strategy from its indexes. x.com x.com
Falling STRC prices raise its effective yield, increasing Strategy's dividend burden and tying the instrument to occasional Bitcoin sales despite its large holdings. Saylor is promoting STRC's 12% yield paid twice a month, and the higher it is, the faster Strategy sells Bitcoin. Replying to @Blockcastcc's report of Peter Schiff's warning that Bitcoin could fall toward $20,000, Strategy should sell everything and repay: preferred holders can be paid, but common holders would be wiped out. x.com … Show more
Strategy might be undervalued because it holds far more Bitcoin than the first time its stock traded at the same price. At $140.51 today, it holds 848,517 BTC, versus 193,000 BTC the first time shares reached $140.51. x.com x.com
Strategy's guaranteed 11.5% yield on bitcoin, an asset with no yield or cash flows, makes it Ponzi-like in a way GBTC never was. It has a good chance of surviving this bear market, but it won't last long. x.com
