Strategy (MSTR) has now experienced at least 10 days of realised volatility since it first added Bitcoin {BTC} to its balance sheet in 2020, according to Jeff Park, head of Alpha Strategy at Bitwise Asset Management.
Realized volatility refers to the actual historical movement of the price of an asset over a given period, in this case 10 days. It is calculated using historical price data and shows how much the price actually fluctuates, as opposed to the amount of future fluctuations expected.
In addition to the modest historical price fluctuations, the implicit volatility (IV) of MSTR currently stands at 48.33%. This is one of the lowest levels recorded in stocks in recent years. Implicit volatility reflects market forecasts of future volatility for stocks derived from options prices. The decline in IV suggests that the options market is anticipating smaller price movements in the future. For comparison, MSTR’s IV peaked at 225% in November 2024 amid a rapid rally in Bitcoin prices after Donald Trump’s victory in the US presidential election. At the time, Bitcoin was trading above $95,000, and MSTR stock price surged from $350 to a high of $525. Currently, MSTR shares are trading at $367.
MSTR currently has 592,345 BTC, but last week only added 245 BTC, marking the smallest weekly purchase since March. This slowdown in accumulation could suggest a saturation point, particularly as other public companies are beginning to adopt Bitcoin’s financial strategies.
Furthermore, the capital flow appears to be spinning from MSTR to smaller Bitcoin Holdings companies. Many of them have experienced strong performance in both stock prices and trading volumes. Among them is the Canada LQWD Technologies Corp. The Corp has recently tripled in its BTC financial strategy.
In particular, this marks the fourth consecutive week in which MSTR has not used its (ATM) equity offering program in the market. As a result, the company is currently trading at a multiple of 1.83 times the net asset value (NAV) in Bitcoin term, known as MNAV. This multiple is calculated by dividing the company’s corporate value by the market value of Bitcoin holdings.
Is MSTR the news from yesterday?
The strategy led by Executive Secretary Michael Saylor has benefited greatly in recent years from the company’s position as a high-beta, highly volatile proxy in Bitcoin. This rise in volatility made MSTR particularly attractive to options traders and speculators, allowing them to make great profits both on the opposite side and on the lower side compared to the BTC itself.
However, its appeal may be reduced as MSTR volatility is compressed. Due to the low price movement, traders, investors and speculators can redeploy capital to more volatile Bitcoin-linked stocks or assets that offer greater trading opportunities.
In response, the strategy also relies on alternative financing strategies, including providing markets related to the persistent preferred stock tickers STRK and STRF. These fixed income products represent strategic pivots, but it remains to be seen whether they will gain meaningful traction.
