Shares of MicroStrategy (NASDAQ:MSTR)the cloud software stock that turned itself into a Bitcoin (CRYPTO: BTC) US Treasuries soared last month, benefiting from historically high Bitcoin prices and the belief that the Trump administration will implement crypto-friendly policies.
As a result, the stock ended the month up 59%, according to data from S&P Global Market Intelligence. Microstrategy’s stock typically trades as a leveraged Bitcoin ETF, which helps explain the stock’s volatility throughout the month.
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Cryptocurrencies and related stocks soared in the wake of the election, as newly elected President Trump gave some indications that he would embrace policies that were friendlier to cryptocurrency.
Among the policies the Trump administration is reportedly considering is creating the White House’s first-ever crypto role and even discussing a strategic Bitcoin reserve. Trump is also expected to appoint a new SEC chairman to replace Gary Gensler, who was seen as unfriendly to the industry.
Shares of Microstrategy rose 13% on November 6 and continued to rise until reaching a peak on November 21. Then they crashed after short seller Andrew Left said he was short the stock.
In a post on X, Left argued that the premium to own MicroStrategy, compared to Bitcoin, had become unreasonable. He said he had previously been bullish on Microstrategy, but that it was now much easier to own Bitcoin, through ETFs and other similar vehicles. The left argued that Microstrategy’s volume was “completely disconnected from BTC fundamentals,” saying it was still bullish on Bitcoin, but Microstrategy was short-lived.
The stock fell 17% on November 21, when that report came out, and ended the month slightly lower.
Microstrategy stock will likely remain closely tied to Bitcoin, but Left makes a good point. The company now owns 402,100, worth $38.7 billion, although Microstrategy’s market capitalization is now $89.1 billion, more than double the value of its Bitcoin holdings.
Some of that premium has been earned as Microstrategy acts as a more aggressive play on Bitcoin as the company continues to aggressively buy the cryptocurrency and convert more of its balance sheet into Bitcoin.
The Trump bubble in Bitcoin may be over for now. The recent rally appears to have stabilized at just below $100,000. Still, further support for Bitcoin from the Trump administration could send the cryptocurrency and Microstrategy soaring even higher, though investors should be aware of the premium in Microstrategy stock.
