The summer of 2025 is the summer of crypto US stocks.
Looking at the capital market, the real protagonist this year is not Meta, nor NVIDIA, nor those traditional technology giants, but the strategic holdings of US stocks that have moved Bitcoin into the books of listed companies. This chart shows the madness of MicroStrategy.
Over the past year, Bitcoin has risen by nearly 94%, surpassing most traditional assets. In contrast, the growth of technology giants such as Meta, NVIDIA, and Tesla is only 30%, while Microsoft, Apple, and the SP 500 index are basically hovering around 0, or even experiencing a correction.
But MicroStrategys stock price soared 208.7%.
Behind MSTR, a large number of crypto-currency holders of US and Japanese stocks are performing their own valuation myths. The premium of market value/net value of holdings (mNAV), borrowing rates, short positions, convertible bond arbitrage, and even GameStop-style short squeezes, all of these are brewing and colliding in the undercurrent of the capital market. Faith and structural games are intertwined, and institutional and retail investors have different mentalities - in the new battlefield of cryptocurrency stocks, how do traders make choices and advance and retreat? What hidden logic is dominating the market?
In this article, BlockBeats will dismantle the craze and game of strategic holding of US stocks from the perspective of three professional traders: from the premium fluctuations of MSTR to the arbitrage battles of upstart companies, from the fantasies of retail investors to the actuarial calculations of institutions, and unfold the cycle of this new capital narrative layer by layer.
The truth about strategic holdings in the U.S. stock market
Long BTC and short micro-strategy seem to be the view of many traditional financial institutions and traders.
The first trader interviewed by BlockBeats , Long Xinyan , adopted this strategy: The implied volatility (IV) of such companies varies greatly. I bought Bitcoin options over the counter using the SignalPlus software, and at the same time sold the call options of this company, such as MSTR, when the U.S. stock market opened.
In Long Xinyan’s own words, this is the volatility scissors spread strategy of long BTC + short MSTR, a strategy that can obtain stable returns.
This strategy is actually a judgment of the premium return range, said Hikari , another trader with a conservative trading style: For example, assuming the current premium is 2 times, and you expect it to fall back to 1.5 times, then when the premium falls to this level, you can lock in the difference and make a profit. But if market sentiment is overly excited and pushes the premium to 2.5 times or 3 times, there will be a floating loss.
Premium seems to be a word that all traders cannot avoid when talking about strategic holdings of U.S. stocks.
The so-called mNAV (Market Net Asset Value), in laymans terms, is the multiple between a companys market value and the net value of its actual crypto assets.
The popularity of this indicator is almost entirely due to the Bitcoin buying frenzy that MicroStrategy (MSTR) set off in 2020. Since then, MSTRs stock price has been almost tied to the rise and fall of Bitcoin, but the market has always priced it much higher than the companys actual net value of currency holdings. Today, this mNAV premium phenomenon has also been copied to more and more crypto asset US and Japanese stocks such as Metaplanet and SRM. In other words, the capital market is willing to pay these companies far more than the sum of currency standard + core assets, and the remaining part is actually a bet on currency holdings, leverage, future financing capabilities and imagination.
mNAV Premium Index, a mirror for micro-strategies
Looking back at the trend of MicroStrategys mNAV premium index, from 2021 to early 2024, the mNAV premium has been running between 1.0 and 2.0 times for a long time, with a historical average of about 1.3 times - that is, the market is willing to pay an average of 30% more premium for the Bitcoin on MSTRs books.
However, since the second half of 2024, MicroStrategys mNAV premium has risen and hovered around 1.8 times. At the end of 2024, it was even more exaggerated. While Bitcoin continued to hit the $100,000 mark, MSTRs mNAV premium also rose, breaking through times, and reached a historical peak of 3.3 times on some extreme trading days.
By the first half of 2025, the mNAV index has been repeatedly fluctuating between 1.6 and 1.9 times. It is obvious that each change in the premium range is behind a round of capital expectations and the rise and fall of speculative sentiment.
In Long Xinyans words, this is actually similar to the operating leverage concept of traditional companies. The markets assessment of the future leverage of these companies will affect their premium: MSTR has raised funds in multiple rounds, and its creditors are all over Wall Street. This ability to raise money and issue additional shares is its core competitiveness. The market expects that you can continue to raise money, and only then will it dare to give you a higher premium. In comparison, it is difficult for start-ups and small-scale new US stock holders to gain the same trust and bonus from the capital market even if they shout their lungs out.
How much premium is reasonable?
Butter is a typical believer in quantification and data. All his decisions are based on historical percentiles and volatility.
The markets premium for MicroStrategy is reasonable at 2-3 times. Butter said this after calculating the changes in Bitcoin and MicroStrategys stock price over the past year.
From the beginning of 2024 to March, when Bitcoin climbed from about $40,000 to $70,000, an increase of about 75%, MSTR rose from $55 to nearly $180, an increase of more than 220%. In this round of increase, MSTR is about three times that of Bitcoin.
In November and December 2024, Bitcoin once again tested the $100,000 mark. This time it rose by about 33%, while MSTR surged from $280 to around $520, an increase of about 86%, more than twice the increase of Bitcoin.
However, in the subsequent correction period from December 2024 to February 2025, when Bitcoin fell from $100,000 to $80,000, a drop of about 20%, MSTR also fell by 2 times, with a cumulative drop of about 50%.
Also from March to May this year, Bitcoin rebounded to about US$108,000, an increase of 35%, while MSTR increased by nearly 70%, also doubling.
In addition to the premium index, Butter also pays attention to the annualized volatility. According to his calculations, the standard deviation of Bitcoins daily return in 2024 is about 4.0%, corresponding to an annualized volatility of about 76.4% for all-weather trading; the standard deviation of MSTRs daily return in the same period is about 6.4%, and the annualized volatility in US stock trading days is as high as 101.6%. In 2025, BTCs annualized volatility has fallen back to about 57.3%, while MSTR remains at around 76%.
Therefore, Butter’s core point of view is very clear: The premium fluctuates between 1.5-3 times, which is a very clear trading signal. Combining volatility with mNAV premium, Butter has distilled the simplest trading logic - go long when the market has low volatility + low premium, and go short when it has high volatility + high premium.
Hikaris approach is similar to Butters, but he also uses option strategies to assist: selling put options in the low premium range to earn premiums, and selling call options in the high premium range to collect time value. Here he reminds ordinary investors: The margin accounts on both sides are independent. If both sides are leveraged, it is easy to be liquidated in extreme market conditions.
Convertible bond arbitrage, Wall Streets mature strategy for playing MSTR
If premium arbitrage and option operations are compulsory courses for retail investors and quantitative players in the crypto-stock world, then the real big funds and institutional players pay more attention to the arbitrage space at the convertible bond level.
On October 30, 2024, Michael Saylor officially launched the 21/21 Plan at an investor conference call: to issue an additional $21 billion in common stock in phases through ATM (At-The-Market) in the next three years to continue buying Bitcoin. The fact is that in just two months, MicroStrategy completed the first round of goals - a total of 150 million shares were issued, $2.24 billion was raised, and 27,200 BTC were added; then in the first quarter of 2025, the company added another $21 billion in ATMs at one time, and simultaneously launched $21 billion in perpetual preferred stocks and $21 billion in convertible bonds. The total scale of financing tools within half a year reached $63 billion.
Butter observed that this overtime issuance has put heavy pressure on MSTRs stock price. In November 2024, although the stock price hit a high of $520, as the markets expectations for a new round of dilution fell, the stock price fell all the way, and in February 2025 it even fell below $240, approaching the premium low point of Bitcoins correction period. Even if there are occasional rebounds, they are often suppressed by the issuance of preferred stocks and convertible bonds. In his view, this is also the important logic that MSTRs stock price is extremely easy to rise and fall in the short term, but has continuous volatility in the long term.
But for many more institutional hedge funds, the focus is not on betting on the direction of up or down, but on capturing volatility through convertible bond arbitrage.
“Convertible bonds usually have higher implied volatility than options of the same period, making them an ideal tool for ‘volatility arbitrage.’ Specifically, you buy MSTR convertible bonds while borrowing an equivalent amount of common stock in the market to short sell, locking in a net exposure of Delta ≈ 0. Every time the stock price fluctuates sharply, you can harvest volatility as profit by adjusting the short position ratio and buying low and selling high.” Butter explained: “This is one of the most mature arbitrage games on Wall Street.”
Behind the scenes, a group of hedge funds are quietly using convertible bonds to play the most mature arbitrage game on Wall Street - Delta neutral, Gamma long.
He added that MSTRs short interest was as high as 14.4%, but many shorts were not bearish on the companys fundamentals, but rather convertible bond arbitrage funds, using continuous short selling to dynamically hedge positions. They dont care whether Bitcoin rises or falls. As long as the volatility is large enough, they can repeatedly buy low and sell high to realize arbitrage differences. Butter concluded.
In a sense, MSTRs convertible bonds are also a bullish option derivative.
Hikari also has a set of experience in combining options and convertible bonds. He described that buying options is like buying lottery tickets. Occasionally you can win the jackpot, but most of the time you pay the market fee tuition; selling options is like a lottery shop owner, relying on the premium to make a steady income. In his actual transactions, options and convertible bonds are both powerful tools for diversifying risks and spreading costs.
Unlike traditional spot or leveraged contracts, the greatest significance of options lies in the time dimension. You can choose different expiration dates of 1 month, 3 months, and 6 months. The implied volatility of different expiration dates has its own advantages, which also creates countless possibilities for matching, making the strategy a three-dimensional combination. In this way, no matter how the market goes, you can always control the risk and return within your own tolerance range.
This set of ideas is exactly the underlying logic of the most mainstream derivatives arbitrage on Wall Street. In the case of MSTR, this type of structured arbitrage is becoming the main battlefield for smart money.
Is it time to short MicroStrategy?
But for ordinary investors and retail investors, this seemingly lively arbitrage feast may not be something worth celebrating. Because when more and more hedge funds and institutions continue to drain blood from the market through additional issuance + arbitrage, common stock holders often become the last ones to take over: they may not be able to dynamically hedge like professional institutions, and it is difficult for them to identify premium return and dilution risks in a timely manner - once a company issues large-scale additional shares or encounters extreme market conditions, the paper profit will soon vanish.
For this reason, in recent years, short micro-strategy has become a hedging option for many traders and structured funds. Even if you are a hardcore long Bitcoin, in the stage of high premium and high volatility, simply holding MSTR stocks will face a greater net value drawdown than holding BTC alone. How to hedge risks, or reversely capture the return market of MSTR premium, has become a test that every trader in the coin stock market must face.
When talking about the topic of shorting micro-strategies, Hikaris attitude became noticeably cautious.
He said that he had suffered losses because of shorting MicroStrategy. He admitted that he had also written a special review on his official account - last year he started shorting MSTR at $320, but the market went all the way up to $550, which put great pressure on holding positions.
Although he eventually recovered his investment with difficulty when MSTR pulled back to more than $300, he described the pressure of bearing the high premium and withstanding the pullback as difficult for outsiders to understand.
This transaction made Hikari completely correct his style. He said frankly that if he really wanted to short now, he would never sell naked spot or directly sell calls, but would give priority to buying put options and other limited risk combinations - even if the cost is higher, he would not rush to confront the market head-on. You still have to lock the risk within the range you can accept. He concluded.
But as mentioned above and pointed out by Butter, MicroStrategy has significantly expanded its common and preferred stock authorizations in recent years, from 330 million shares to more than 10 billion shares, and has frequently issued preferred stocks, convertible bonds, and continued ATM issuance. These operations have laid the groundwork for future unlimited dilution. In particular, the continuous ATM issuance and premium arbitrage, as long as the stock price is higher than the net assets, the companys management can buy coins risk-free, but the common stock price faces the pressure of continued dilution.
Especially if Bitcoin falls sharply, this model of high premium financing + continuous purchase of coins will face greater pressure. After all, MicroStrategys model essentially relies on the markets continued high premium and confidence in Bitcoin.
To this end, Butter also mentioned two double inverse ETFs that specialize in shorting micro-strategies: SMST and MSTZ, with expense ratios of 1.29% and 1.05% respectively: But this is more suitable for experienced short-term traders, or investors who use it to hedge existing positions. It is not suitable for long-term investors because leveraged ETFs have a leverage decay effect, and long-term holdings often have returns lower than expected.
Will “holding US stocks with cash” lead to a short squeeze similar to GameStop’s?
If shorting MSTR is a risk hedging tool for institutions and veterans, then short squeeze is the ultimate narrative that is inevitably triggered by every round of capital market climax. In the past year, there has been no shortage of institutions in the market that publicly shorted coin holding companies such as MicroStrategy and Metaplanet. Many investors cant help but think of the retail short squeeze incident of GameStop that shocked Wall Street - so, do these encrypted US stocks also have the soil to ignite a short squeeze?
On this issue, although the three traders have different analytical perspectives, their views are somewhat similar.
Long Xinyan believes that from the perspective of implied volatility (IV), MSTR and other benchmarks have not shown obvious overdraft signals. The greater risk comes from the disturbance of the core logic of premium by variables such as policies or taxes. He joked: Now the shorts should all go to CRCL.
Hikaris analysis was more direct. He believes that it is difficult for a giant like MicroStrategy, which has a market value of tens of billions of dollars, to have an extreme short squeeze like GameStop. The reason is simple. The circulating market is too large and the liquidity is too strong. It is difficult for retail investors or hot money to work together to leverage the overall market value. In contrast, small companies like SBET, which initially had a market value of only tens of millions of dollars, are likely to have a short squeeze. He added that SBETs performance in May this year is a typical case - the stock price rose from two or three dollars to $124 in just a few weeks, and the market value soared nearly forty times. Low-market-cap targets with insufficient liquidity and scarce borrowing securities are most likely to become a hotbed for short squeezes.
Butter also agreed with this statement. He explained to BlockBeats in more detail the two core signals of a short squeeze: first, the stock price experiences an extreme single-day surge, with the increase entering the top 0.5% percentile in history; second, the share of stocks available for financing in the market drops sharply, making it almost impossible to borrow stocks, and short sellers are forced to cover their positions.
“If you see a stock suddenly move higher with high volume, and at the same time there are very few shares available to lend, short positions are high, and borrowing rates are skyrocketing, that’s basically a sign that a short squeeze is brewing.”
Take MSTR as an example. In June this year, its total short selling volume was about 23.82 million shares, accounting for 9.5% of the circulating market. Historically, it even climbed to 27.4 million shares in mid-May, with short positions accounting for as high as 12-13%. However, from the perspective of financing and borrowing supply, MSTRs short squeeze risk is not extreme. The current annualized borrowing rate is only 0.36%, and there are still 3.9-4.4 million shares available for borrowing in the market. In other words, although the short pressure is not small, it is still a long way from a real short squeeze.
In sharp contrast is SBET (SharpLink Gaming), a US stock that hoards ETH. As of now, the annualized interest rate for SBET securities lending is as high as 54.8%, and it is extremely difficult and costly to borrow stocks. About 8.7% of the circulating market is short positions, and all short positions can be covered in just one days trading volume. High costs plus a high proportion of short positions mean that once the market reverses, SBET is likely to experience a typical rolling squeeze effect.
Looking at the US stock SRM Entertainment (SRM) that hoards TRX, it seems even more extreme. The latest data shows that the annualized cost of borrowing SRM has even reached 108-129%, the number of borrowable shares hovers between 600,000 and 1.2 million, and the short position ratio is roughly 4.7-5.1%. Although the short position ratio is only moderate, the extremely high financing cost directly compresses the short-selling space. Once the market changes, the capital side will be under tremendous pressure.
As for DeFi Development Corp. (DFDV), the US stock of Strategic Savings SOL, the cost of borrowing securities was as high as 230% at one time, the short position ratio was as high as 14%, and almost one-third of the circulating shares were shorted. Therefore, in general, although the cryptocurrency stock market has the soil for short squeeze, the stocks that really have the ability to detonate the long-short game singularity are often those with smaller market capitalization, poorer liquidity, and higher degree of capital control.
There is only one MicroStrategy in the world
For example, if you have a market value of 10 billion US dollars, and the market believes that you can raise another 20 billion to do things, then giving you a 2-fold premium is not expensive. But if you have just gone public and your market value is still small, even if you shout to the sky, I want to raise 500 million, the capital market may not really believe you. Long Xinyan pointed out the core watershed of current cryptocurrency holding companies - only those who are truly big and strong, with continuous financing and continuous expansion of balance sheets, are eligible to enjoy the high premium of the market. Those small players with limited scale and newly listed companies will find it difficult to replicate the valuation myth of MSTR in the market.
Looking back over the past two years, strategic coin holding companies have gradually gathered in the U.S. stock market - some have heavy positions in Bitcoin, some have invested in mainstream assets such as Ethereum, SOL, BNB and even HLP, and some have imitated the MSTR strategy and simply want to take advantage of the coin holding premium.
How do you view the investment logic and market positioning of such companies? Long Xinyans view is still calm: This track is too crowded now. Companies that only have a shell or a gimmick and lack real business and operational support are essentially too young. Listed companies are not QQ groups. It is not that a few people can play the capital game by just gathering at a table. He emphasized that the capital market has a set of mature rules and bottom lines. It is difficult to gain a long-term foothold in the US stock market relying solely on the grassroots temperament and enthusiasm of Web3.
In addition, there are also big differences in pricing for such companies in different countries and regions. For example, Metaplanet in Japan is essentially a listed company that started out as a hotel company, and is now the ninth largest Bitcoin holder in the world. Because Japans local tax policy prefers holding crypto assets, and many Asian investors cannot buy cryptocurrencies, crypto stocks such as MSTR and Metaplanet have even become crypto ETFs in the minds of many people. In Hong Kong, on the other hand, some Hong Kong-listed companies are also trying to allocate crypto assets, but due to dispersed liquidity and insufficient market depth, they cannot enjoy the same dividends as US stocks. Long Xinyan said bluntly: I am not very optimistic about Hong Kong-listed companies doing this.
It is undeniable that putting a large amount of Bitcoin into a companys balance sheet is indeed a symbol of strength. But the rules of the game in the market have not changed - there are very few high-quality companies, and most companies are just taking the opportunity to chase a wave of popularity and valuation premiums. Once Bitcoin plummets, those companies that have leveraged their balance sheets and lack real business will easily fall into trouble due to the exhaustion of refinancing capabilities. They will be forced to sell their Bitcoin holdings at the bottom of the bear market, which in turn will increase the downward pressure on the entire market, trigger a chain reaction, and form a vicious cycle similar to the death spiral.
In a bull market, such companies often present a self-reinforcing structure of left foot stepping on right foot - the price of the currency rises, the value of the currency is increased, the market value soars, the market is popular, and the refinancing is smooth. But in a bear market, everything will be reversed, and the valuation system may avalanche at any time. Longxin Salts experience is very direct: I will never buy high premiums, and I will not buy those that have recently transformed. I am afraid of being too young, and I will not touch those that have not raised more than two rounds of financing - I am afraid that the previous creditors are actually my own people, just like real estate developers playing with US dollar bonds.
During the interview, Hikaris viewpoint was similar to Long Xinyans. He said that many newly emerged strategic coin holding companies actually replicated MicroStrategys script - buying coins, raising funds, telling stories, and relying on coin holding premium to increase market value. Some are even VCs in the coin circle and project parties in transformation. Hikari said frankly: In fact, many of these companies are here to cheat money.
“In fact, the fundamental reason why MSTR can get to where it is today is that it is large enough and holds a large number of bitcoins. There are many potential ways to play with it in the future, such as using these bitcoins for large-scale pledges, or developing some complex option strategies to revitalize assets. As long as the company is willing to distribute dividends and return these profits to shareholders, this path can actually continue.
He added that in addition to MicroStrategy, he is currently only paying attention to a few US stocks with cash that have clear asset disclosures and decent main businesses, such as Japans Metaplanet and medical device company SMLR (Semler Scientific). As long as the asset structure is clear enough and the main business is not outrageous, such companies are still worth paying attention to.
As for how the market changes and how strategies change, Long Xinyan, Hikari and Butter all agree on one point: no matter how the narrative develops, Bitcoin will ultimately remain the scarcest and most consensus-based currency in the crypto market.
