Correlation Between MicroStrategy Stock and Bitcoin
The stock of MicroStrategy shows a very strong positive correlation to Bitcoin with a correlation coefficient of 0.83 on a monthly basis. This means that stock prices and the Bitcoin price generally move very similarly. However, there are indications that this close coupling is currently loosening or diverging somewhat. While Bitcoin has reached new all-time highs, the MicroStrategy stock shows signs of weakness or a downward trend.
Potential Undervaluation
An analyst named Timothy Peterson found that the MicroStrategy stock achieves on average about 1.5 times the returns of Bitcoin in the short term. Despite this leverage, the stock appears to be trading below its expected value – thus undervalued in relation to the current price increase in Bitcoin. This discrepancy could present a buying opportunity for investors who believe in a restoration of the historical correlation.
Company Situation and Risks
Despite the strong commitment to Bitcoins, MicroStrategy is suffering financially: In the first quarter of 2025, a high net loss of over $4 billion was reported. Analysts warn of long-term financial risks despite the potential from the rising BTC value.
Conclusion for Investors
MicroStrategy offers indirect exposure to the crypto market through stock trading. The current potential undervaluation relative to the Bitcoin upward trend may offer opportunities; however, investors should be mindful of the high volatility in both BTC and MSTR, the company’s financial losses, and potential future divergences.