Bitcoin and MSTR price correlation

Discussion in 'Crypto Assets' started by johnarb, Nov 9, 2021.

  1. johnarb


    Sorry to hear that. I'm holding MSTR call options which after a volatile trading session are hardly unchanged, just like the underlying stock

    I noticed bitcoin btc has been weak during stock market trading hours, the downtrend today started when the US markets opened

    Anyway, I agree with you this should be temporary

    Bitcoin will go to $100K by 12/31/2021 and MSTR will be $1,100-1500+ as a result :D
    Baron likes this.
  2. johnarb


    Inflation numbers came out high and bitcoin btc is above $68K might have reached a new high

    MSTR opening price is tame, considering above, only up a little

    Could be easy long for people wanting to get in

    I'm long 5 MSTR Jan 2022 750 calls

    [edit: current price of MSTR is $854.58]
    Last edited: Nov 10, 2021
  3. Pekelo


    When I saw the title I wasn't sure if I started this thread or not? :)

    Anyhow HUT is the best performing mining stock, doubling in the last month, compared to MSTR's 50% up. Although I think HUT is topping right now...
    johnarb likes this.
  4. nitrene


    With Bitcoin at roughly the same price as back in February, why is MSTR down 35%? MARA & HUT are both higher since the last BTC 68K.

    If I remember correctly there was a massive mini bubble in the hyper growth stocks from 11/2020 to 2/2021.
  5. johnarb


    I think during that time, MSTR got way ahead of itself

    Today is not a good day for MSTR and the markets, even bitcoin which hit all time high earlier today is below $67K

    I like holding call options as I have a defined risk capital investment
  6. nitrene


    MSTR is fairly correlated to both the QQQ & BTC. Some sort of hybrid as is MARA & HUT, however the miners are 1 trick ponies so they are extremely leveraged.

    The MSTR Jan 2022 750 calls are currently at ~ $134 and if MSTR goes to $1500 it would be worth ~$760 so that's about a 466% gain. That's a pretty good trade.

    Right now MSTR seems more correlated to BTC where as MARA & HUT seem like they track the QQQ more:

    MSTR -1.4%
    MARA +3.8%
    HUT +6.7%
    BTC -1.6% (the BRR Nov 2021 futures)

    Of course both MARA & HUT just had earnings so maybe that has influenced the price short term.
    johnarb likes this.
  7. VicBee


    Great thread. For better or for worse I'm a stock trader, usually day trader but "day" can extend several weeks, by choice or to my dismay.

    MSTR came on my radar several months ago when it popped up $50 in a session. Definitely got me intrigued so I did a little research and have been trading it since.
    MicroStrategy is definitely an unusual company, whose primary business is cloud based BI, but whose stock is valued primarily for its BTC holding. It only floats 3% of its shares and the rest is held by the execs of the company.
    The tight float and BTC correlation explain the wild up and down swings which can be daunting, but the good news is I'm positive on MSTR.
    Also, I like that stock because it correlates with BTC and I don't think anyone of us would be looking at MSTR if it didn't, because we all believe in the growth of BTC in the coming 12 months to 5 years.

    As option traders you guys are projecting months ahead, while I look at the past and here and now. I hope your insights and feedback will help me be more accurate.
    johnarb likes this.
  8. johnarb


    As a non-active trader, it's easier for me to put an options position as a set-it-and-forget it trade

    I'm also long the spot btc's which unlike the MSTR options do not have expiration

    Bitcoin price movement has been a source of frustration this week. Personally, I expected btc to be above $70K and when it reversed correction after hitting $69K all time high price, it was emotionally tiring for me

    I can separate the 2 positions, fairly easily since there's no time pressure on being long the actual coins, it's easier to brush it off even if the $ value is bigger

    And to a certain degree, MSTR options position is also easy to shrug off for me since I know all I can lose is the cost of the options

    I'm planning to sell the MSTR options if MSTR hits above $1,500/share or sell the options in the first week of January whichever comes first

    I just need btc to act properly in the next 2 months. I don't need bitcoin to go below $50K during that time

    It would be most preferable if btc hurries up and goes above $70K in the next 5-10 days and to be above $80K by the first week of December. It's not too much to ask, imho :D
    VicBee likes this.
  9. VicBee


    I too would like to see MSTR share price hit 860+ before year end. It's been in the 850 to 880 bracket often enough these last months that it should return, provided BTC pops up again.
    johnarb likes this.
  10. johnarb


    On another thread, I mentioned that I think of MicroStrategy as a synthetic bitcoin miner

    Of course, MSTR is not a true bitcoin miner in the sense that they do not produce new bitcoins using computer hardware and massive amount of electricity

    They do acquire ownership of bitcoins using their company's operating cash flow, sale of company stock and issuing debt

    In case you have not seen this video I posted months ago on another thread, this is the more eloquent explanation of the MSTR bitcoin accumulation strategy

    Click play and watch for 12 minutes

    Michael Saylor was a billionaire before he got MicroStrategy to purchase bitcoins. The move certainly made him even richer and he even used his own money to purchase bitcoins, but he did not need to take such risks for himself nor his company so why did he?

    The video says for his employees and I think it makes sense

    #10     Nov 13, 2021