According to The Block, short-selling firm Kerrisdale Capital stated in its latest research report that MicroStrategy’s stock is currently overvalued. The company currently holds a short position in MicroStrategy and at the same time holds long positions in Bitcoin spot ETFs from BlackRock and Fidelity to hedge against upside risks. The report states that MicroStrategy’s stock was previously considered the main way for US investors to bet on Bitcoin due to the company’s large holdings of Bitcoin spot. However, with the introduction of Bitcoin spot ETFs, US investors now have more options. Kerrisdale Capital stated in the report that it is possible that they are not the only institution “long Bitcoin while shorting MicroStrategy”. During the Bitcoin bull run, the speed of MicroStrategy’s stock price increase far exceeded that of Bitcoin, resulting in a premium of MicroStrategy relative to Bitcoin. This has attracted many institutions to engage in “arbitrage trading between MicroStrategy stock (MSTR) and Bitcoin”. However, there have been no signs of weakness in MicroStrategy so far, which seems to have caused many traders or institutions to still be in floating losses or even face liquidation. According to a report in mid-March, bearish traders betting on a decline in MicroStrategy’s stock price have accumulated approximately $3.3 billion in unrealized losses from 2024 to mid-March.
