The MicroStrategy Effect

It all started with MicroStrategy. Now, it seems like every week another publicly traded company announces plans to hoard Bitcoin or other cryptocurrencies.

But here’s the catch: Investors are willing to assign these companies hefty valuation premiums simply because they’re buying Bitcoin.

What happens if their stocks don’t rise as a result?

Metaplanet’s Premium Puzzle

Consider Japan’s Metaplanet, which has replicated Michael Saylor’s Bitcoin frenzy at MicroStrategy.

According to 10xResearch, its stock price implies a Bitcoin valuation of $596,154—five times Bitcoin’s current price of around $106,000.

Before going all-in on Bitcoin, Metaplanet was a budget hotel operator that pivoted to blockchain infrastructure. Those operations have since been shelved as the company rebranded itself as a Bitcoin reserve firm.

“Time to short?” wrote 10xResearch in a May 27 report. “The signals we’re seeing now closely resemble past inflection points.”

A Growing Trend

Metaplanet is just one of many companies following in the footsteps of Saylor’s firm, now rebranded as Strategy.

On May 27, Trump Media & Technology Group (TMT) announced plans to raise $2.5 billion to buy Bitcoin.

This week, video game retailer GameStop—famous as a “meme stock”—purchased 4,710 Bitcoin worth approximately $513 million at current prices.

Both companies saw their stock prices decline.

These new Bitcoin reserve firms employ a relatively simple strategy: raise capital by issuing convertible bonds, then use the proceeds to buy Bitcoin in bulk.

Why the sudden rush of Saylor copycats? In short, because it works.

Since launching its Bitcoin acquisition strategy in August 2020, Strategy’s stock has surged tenfold. The company now holds over 576,000 Bitcoin, worth roughly $63 billion.

Reasons for Caution

But skeptics argue there are good reasons to tread carefully.

For starters, the idea that hoarding Bitcoin—or any cryptocurrency—on a corporate balance sheet is a surefire bet is far-fetched.

“It’s concerning how many Saylor imitators assume this strategy is risk-free,” said noted macro analyst Noelle Acheson. “Especially those jumping in at elevated Bitcoin prices.”

When Strategy first bought Bitcoin, it traded around $11,000—just a tenth of today’s $107,000.

As the strategy gains popularity, analysts and seasoned investors may focus on one key metric to cut through the noise: Net Asset Value (NAV).

NAV represents the book value of a company’s holdings.

A NAV mismatch occurs when a stock’s price diverges from the actual value of its assets.

Take Metaplanet: The company holds 7,800 Bitcoin worth roughly $830 million, yet its market cap is $5.6 billion—implying a per-Bitcoin valuation of $596,154.

In other words, investors are paying five times Bitcoin’s spot price for indirect exposure.

“A dangerous NAV distortion is brewing,” warned 10xResearch analysts.

This suggests Metaplanet’s stock—up 233% this month—could reverse course at any moment.

But don’t forget Strategy. Its frequent premiums may benefit shareholders, but they’re also cause for concern.

Per Strategy Tracker data, in 2020, investors valued Strategy’s stock at over six times its Bitcoin holdings. Last year, it traded at more than three times.

Hedge fund veterans like legendary short-seller Jim Chanos have capitalized on NAV mismatches by shorting Strategy while buying Bitcoin directly.

Insider Selling Adds Pressure

Meanwhile, the crypto reserve strategy is gaining momentum—but not without turbulence.

This week, TMT—parent company of Trump’s social media platform—plans to raise $2.5 billion for Bitcoin purchases. Yet its stock plunged 11% after the announcement.

Why? Some fear insider selling.

The company noted that potential stock sales could include shares held by insiders, such as a trust controlled by Donald Trump Jr., which owns 57% of the firm.

Questionable Valuations

Many Saylor-inspired companies—some not even crypto-native—now derive their valuations solely from Bitcoin holdings.

Semler Scientific, a medical device maker, saw its stock soar 30% after buying 581 Bitcoin.

Strive Asset Management, founded by former presidential candidate Vivek Ramaswamy, has raised $750 million for Bitcoin purchases, with another $750 million in the works.

Tech firm ASST announced a merger with Strive to become a Bitcoin reserve company, sending its stock up 194%.

Twenty One, a startup backed by Tether, SoftBank, and Cantor Fitzgerald and led by Bitcoin evangelist Jack Mallers, exists solely to accumulate Bitcoin.

Its holding company, Cantor Equity Partners, has surged over 300% since its April launch—despite listing 76 business model risks, many unconventional.

Nakamoto Inc, led by David Bailey, merged with a healthcare firm to raise $700 million for Bitcoin acquisitions.

Macro Risks Loom Large

While macro analyst Noelle Acheson acknowledges that adding Bitcoin to corporate reserves makes sense, she warns that companies existing solely for Bitcoin speculation raise red flags.

The biggest risk? Macroeconomic uncertainty—a major wildcard in the Trump era.

Even Michael Saylor isn’t immune to geopolitics.

Tariffs, rising inflation, and the Fed’s unpredictable rate policy have rattled markets. Persistently high Treasury yields are particularly worrisome, signaling eroding confidence in the dollar as a safe haven.

This bodes poorly for risk assets like stocks and crypto.

Diminishing Impact

The upshot? Saylor’s billion-dollar Bitcoin buys, once a tailwind for the cryptocurrency, may no longer pack the same punch.

If stocks like Strategy or Metaplanet keep rising, more imitators will emerge—potentially diluting the strategy’s effectiveness.

As Acheson put it: “We should temper our enthusiasm for this gimmick.”

“Innovative financial engineering always starts as an exciting new profit tool, but as interest and risk saturate, it inevitably becomes fragile.”

The MicroStrategy Effect

It all started with MicroStrategy. Now, it seems like every week another publicly traded company announces plans to hoard Bitcoin or other cryptocurrencies.

But here’s the catch: Investors are willing to assign these companies hefty valuation premiums simply because they’re buying Bitcoin.

What happens if their stocks don’t rise as a result?

Metaplanet’s Premium Puzzle

Consider Japan’s Metaplanet, which has replicated Michael Saylor’s Bitcoin frenzy at MicroStrategy.

According to 10xResearch, its stock price implies a Bitcoin valuation of $596,154—five times Bitcoin’s current price of around $106,000.

Before going all-in on Bitcoin, Metaplanet was a budget hotel operator that pivoted to blockchain infrastructure. Those operations have since been shelved as the company rebranded itself as a Bitcoin reserve firm.

“Time to short?” wrote 10xResearch in a May 27 report. “The signals we’re seeing now closely resemble past inflection points.”

A Growing Trend

Metaplanet is just one of many companies following in the footsteps of Saylor’s firm, now rebranded as Strategy.

On May 27, Trump Media & Technology Group (TMT) announced plans to raise $2.5 billion to buy Bitcoin.

This week, video game retailer GameStop—famous as a “meme stock”—purchased 4,710 Bitcoin worth approximately $513 million at current prices.

Both companies saw their stock prices decline.

These new Bitcoin reserve firms employ a relatively simple strategy: raise capital by issuing convertible bonds, then use the proceeds to buy Bitcoin in bulk.

Why the sudden rush of Saylor copycats? In short, because it works.

Since launching its Bitcoin acquisition strategy in August 2020, Strategy’s stock has surged tenfold. The company now holds over 576,000 Bitcoin, worth roughly $63 billion.

Reasons for Caution

But skeptics argue there are good reasons to tread carefully.

For starters, the idea that hoarding Bitcoin—or any cryptocurrency—on a corporate balance sheet is a surefire bet is far-fetched.

“It’s concerning how many Saylor imitators assume this strategy is risk-free,” said noted macro analyst Noelle Acheson. “Especially those jumping in at elevated Bitcoin prices.”

When Strategy first bought Bitcoin, it traded around $11,000—just a tenth of today’s $107,000.

As the strategy gains popularity, analysts and seasoned investors may focus on one key metric to cut through the noise: Net Asset Value (NAV).

NAV represents the book value of a company’s holdings.

A NAV mismatch occurs when a stock’s price diverges from the actual value of its assets.

Take Metaplanet: The company holds 7,800 Bitcoin worth roughly $830 million, yet its market cap is $5.6 billion—implying a per-Bitcoin valuation of $596,154.

In other words, investors are paying five times Bitcoin’s spot price for indirect exposure.

“A dangerous NAV distortion is brewing,” warned 10xResearch analysts.

This suggests Metaplanet’s stock—up 233% this month—could reverse course at any moment.

But don’t forget Strategy. Its frequent premiums may benefit shareholders, but they’re also cause for concern.

Per Strategy Tracker data, in 2020, investors valued Strategy’s stock at over six times its Bitcoin holdings. Last year, it traded at more than three times.

Hedge fund veterans like legendary short-seller Jim Chanos have capitalized on NAV mismatches by shorting Strategy while buying Bitcoin directly.

Insider Selling Adds Pressure

Meanwhile, the crypto reserve strategy is gaining momentum—but not without turbulence.

This week, TMT—parent company of Trump’s social media platform—plans to raise $2.5 billion for Bitcoin purchases. Yet its stock plunged 11% after the announcement.

Why? Some fear insider selling.

The company noted that potential stock sales could include shares held by insiders, such as a trust controlled by Donald Trump Jr., which owns 57% of the firm.

Questionable Valuations

Many Saylor-inspired companies—some not even crypto-native—now derive their valuations solely from Bitcoin holdings.

Semler Scientific, a medical device maker, saw its stock soar 30% after buying 581 Bitcoin.

Strive Asset Management, founded by former presidential candidate Vivek Ramaswamy, has raised $750 million for Bitcoin purchases, with another $750 million in the works.

Tech firm ASST announced a merger with Strive to become a Bitcoin reserve company, sending its stock up 194%.

Twenty One, a startup backed by Tether, SoftBank, and Cantor Fitzgerald and led by Bitcoin evangelist Jack Mallers, exists solely to accumulate Bitcoin.

Its holding company, Cantor Equity Partners, has surged over 300% since its April launch—despite listing 76 business model risks, many unconventional.

Nakamoto Inc, led by David Bailey, merged with a healthcare firm to raise $700 million for Bitcoin acquisitions.

Macro Risks Loom Large

While macro analyst Noelle Acheson acknowledges that adding Bitcoin to corporate reserves makes sense, she warns that companies existing solely for Bitcoin speculation raise red flags.

The biggest risk? Macroeconomic uncertainty—a major wildcard in the Trump era.

Even Michael Saylor isn’t immune to geopolitics.

Tariffs, rising inflation, and the Fed’s unpredictable rate policy have rattled markets. Persistently high Treasury yields are particularly worrisome, signaling eroding confidence in the dollar as a safe haven.

This bodes poorly for risk assets like stocks and crypto.

Diminishing Impact

The upshot? Saylor’s billion-dollar Bitcoin buys, once a tailwind for the cryptocurrency, may no longer pack the same punch.

If stocks like Strategy or Metaplanet keep rising, more imitators will emerge—potentially diluting the strategy’s effectiveness.

As Acheson put it: “We should temper our enthusiasm for this gimmick.”

“Innovative financial engineering always starts as an exciting new profit tool, but as interest and risk saturate, it inevitably becomes fragile.”