The "Coin-Stock" Frenzy of 2025: Madness, Premiums, and Risks

In the summer of 2025, the crypto US stock market experienced a full-blown explosion.

Looking back at the capital market, the real protagonists this year are not tech giants like Meta and NVIDIA, but rather those "strategic holders" of US stocks that have incorporated Bitcoin into their balance sheets. Among them, MicroStrategy('s performance is particularly impressive.

In the past year, Bitcoin's increase was close to 94%, far exceeding most traditional assets. In contrast, tech stocks such as Meta, NVIDIA, and Tesla had increases of no more than 30%, while Microsoft, Apple, and the S&P 500 index remained basically flat. However, MicroStrategy's stock price surged by 208.7%.

After MSTR, a batch of U.S. and Japanese stocks holding cryptocurrencies are also showcasing their own valuation myths. The market capitalization/net asset value premium )mNAV(, securities lending rates, short positions, convertible bond arbitrage, and various other indicators and strategies are interwoven, forming a unique ecosystem for this emerging market.

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"Strategic Holding of Coins" The Truth About US Stocks

For the "strategic holding of coins" in US stocks, the mNAV premium index is a core indicator. Taking MicroStrategy as an example, from 2021 to early 2024, its mNAV premium fluctuated between 1.0 and 2.0 times, with a historical average of about 1.3 times. However, starting in the second half of 2024, MSTR's premium continued to rise, hovering around 1.8 times. At the end of 2024, when Bitcoin was approaching the $100,000 mark, the premium even broke through 3 times at one point, reaching a historical high of 3.3 times on some trading days.

Entering the first half of 2025, the mNAV index fluctuates between 1.6 and 1.9 times. Each change in the premium range reflects changes in funding expectations and speculative sentiment.

Regarding the reasonableness of the premium, different traders have different views. Some believe that a premium of 2-3 times is reasonable, as the stock price of MSTR often fluctuates 2-3 times that of Bitcoin. Others combine the premium with volatility, going long when volatility is low and the premium is low, and shorting when volatility is high and the premium is high.

In addition to ordinary investors, some institutional investors pay more attention to more complex strategies such as convertible bond arbitrage. They achieve a "Delta neutral, Gamma long" strategy by buying convertible bonds and shorting an equivalent amount of common stocks to profit from volatility.

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Can we short MicroStrategy?

As more and more institutions extract liquidity from the market through "increased issuance + arbitrage", ordinary shareholders often become the last ones to take the hit. Therefore, "shorting micro strategies" has become a choice for some traders.

Shorting MSTR is not an easy task. There were traders who shorted at the $320 level, and the market surged all the way up to $550, ultimately barely breaking even at just over $300. This experience has been described as a pressure that is "hard for outsiders to understand."

Therefore, if you want to short, a more prudent way is to choose strategies like buying put options that have limited risk. The market has also seen the emergence of double inverse ETFs specifically designed for shorting micro strategies, such as SMST and MSTZ, but these types of products are more suitable for experienced short-term traders or for hedging existing positions.

As for the "short squeeze" market similar to GameStop, the likelihood of it happening with a giant like MSTR, which has a market value of hundreds of billions of dollars, is low. In contrast, smaller companies with market values of only a few tens of millions of dollars are more likely to experience extreme market conditions.

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The Future of "Holding Coins in US Stocks"

As more and more companies attempt "strategic holding of coins", the market is reassessing the investment logic of these companies. There is a viewpoint that only companies that truly grow larger and stronger, possessing the ability to continuously finance and expand their balance sheets, can enjoy the market's high premiums. Those limited in scale and just starting out, the "small players", find it difficult to replicate the valuation myth of MSTR.

Different countries and regions have varying pricing for such companies. For example, Metaplanet in Japan is favored due to local policies, while similar attempts in Hong Kong are relatively lukewarm.

Overall, incorporating a large amount of Bitcoin into the balance sheet does showcase a certain strength, but the market rules have not changed - quality companies are still scarce, and most companies are merely chasing trends and valuation premiums. Once Bitcoin experiences a significant drop, those companies with high leverage and lacking real business support are likely to face difficulties.

Therefore, for investors, the key is to identify the company's asset structure, main business, and other fundamentals, rather than blindly following the "holding coin" concept. Regardless of how the market changes, Bitcoin, as the most widely recognized asset in the crypto market, still maintains its core scarcity and value.

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