Is Wall Street crazy for choosing to buy MSTR stock at a 75% premium instead of buying 100,000 Bitcoin?

Investors who buy MSTR stock are not only buying Bitcoin, but also "the ability to continue to increase their holdings in Bitcoin in the future." This article is from Will Owens, an article written by Galaxy and compiled, compiled and written by Foresight News. (Synopsis: MicroStrategy buys another $530 million BTC position approaching 600,000, Michael Saylor: You only wish you bought more in the first place) (Background supplement: Microstrategy buys Bitcoin to get into trouble? Five class-action lawsuits allege that Strategy Investments contains "misrepresentations" of companies that put bitcoin on their balance sheets has become one of the most talked about public market narratives in 2025. Although investors already have a variety of direct access to Bitcoin positions (ETFs, spot Bitcoin, packaged Bitcoin, futures contracts, etc.), many still choose to acquire Bitcoin risk positions by buying Bitcoin Reserve Company shares whose share price is significantly higher than Bitcoin's net asset value (NAV). This premium is the difference between a company's share price and its value per Bitcoin holding. For example, if a company holds $100 million worth of Bitcoin and has 10 million shares outstanding, its NAV per Bitcoin share is $10. If the share price is $17.5, the premium is 75%. In this context, mNAV (i.e. equity value multiple) reflects how many times the stock price is Bitcoin NAV, and the premium rate is the percentage of mNAV minus 1. The average investor may wonder: why can such companies be valued so much more than their Bitcoin assets themselves? Leverage and access to capital Perhaps the most important reason for the premium of bitcoin reserve companies' share prices over their bitcoin assets is their ability to leverage through public capital markets. These companies can raise funds by issuing bonds and shares to increase their holdings of Bitcoin. Essentially, they act as Bitcoin's high-β proxy tool, amplifying Bitcoin's sensitivity to market volatility. The most commonly used and effective means of this strategy is a "mark-to-market" (ATM) share issuance plan. This mechanism allows companies to issue additional shares gradually at the current share price with minimal impact on the market. When the share price is at a premium to Bitcoin NAV, the amount of Bitcoin that can be purchased for every $1 raised through the ATM program will exceed the dilution per Bitcoin holding due to the additional offering. This creates a "cycle of appreciation in bitcoin holdings per share" that constantly amplifies bitcoin positions. Strategy (formerly MicroStrategy) is a prime example of this strategy. Since 2020, the company has raised billions of dollars through convertible bond offerings and secondary equity fundraising. As of June 30, Strategy held 597,325 BTC (approximately 2.84% of the liquidity). This type of financing tool is only available to listed companies, allowing them to continue to increase their Bitcoin holdings. This not only amplifies bitcoin positions, but also forms a compound narrative effect, and each successful fundraising and bitcoin increase strengthens investors' confidence in the model. Therefore, investors who buy MSTR stock are not only buying Bitcoin, but also "the ability to continue to increase their holdings in Bitcoin in the future." How big is the premium? The table below compares the premiums of some Bitcoin reserve companies. Strategy is the world's largest public company that holds Bitcoin and is the most well-known representative of the field. Metaplanet is the most aggressive Bitcoin holder (more on its transparency benefits later). Semler Scientific was early on on in this trend, buying bitcoin last year. France's The Blockchain Group shows that this trend is spreading from the United States to the world. NAV premium rates for some Bitcoin reserve companies (as of June 30; Assuming a Bitcoin price of $107,000): While Strategy's premium rate is relatively modest (around 75%), smaller companies such as The Blockchain Group (217%) and Metaplanet (384%) have significantly higher premium rates. These valuations suggest that market pricing reflects not only Bitcoin's own growth potential, but also a combination of capital market access, speculative space, and narrative value. Bitcoin Yield: The Key Indicator Behind the Premium One of the core metrics driving the premium of these companies' shares is the "Bitcoin yield." This indicator measures the growth of a company's Bitcoin holdings per share over a specific period of time, reflecting its efficiency in using its fundraising power to increase its Bitcoin holdings without causing excessive equity dilution. Among them, Metaplanet is known for its transparency, and its official website provides [real-time bitcoin dashboard] to dynamically update bitcoin holdings, bitcoin holdings per share and bitcoin yields. Source: Metaplanet Analytics () Metaplanet has made public proof of reserves, which has not been adopted by other companies in the industry. For example, Strategy does not employ any on-chain verification mechanism to prove its Bitcoin holdings. At the Bitcoin 2025 conference in Las Vegas, [Executive Chairman Michael Saylor explicitly objected] to the public proof of reserves, saying that such a move would be a "bad idea" because of security risks: "It would weaken the security of issuers, custodians, exchanges and investors." This view is controversial, and on-chain proof of reserve only needs to disclose the public key or address, not the private key or signed data. Since Bitcoin's security model is based on the principle that "public keys can be shared securely", exposing wallet addresses does not compromise asset security (which is the nature of the Bitcoin network). On-chain proof of reserve provides investors with a way to directly verify the authenticity of a company's Bitcoin holdings. What happens if the premium disappears? The high valuation of Bitcoin Reserve Company still exists in a bull market environment where Bitcoin prices are rising and retail investors are enthusiastic. No Bitcoin reserve company has yet been trading below NAV for a long time. The premise of this business model is that the premium persists. As [VanEck analyst Matthew Sigel points out]: "When the stock price falls to NAV, equity dilution will no longer be strategic, but will become a value extraction." This statement points to the core vulnerability of the model, where ATM share issuance programs (the capital engine of these companies) essentially rely on share price premiums. When the stock price is higher than the value of Bitcoin per share, equity fundraising can realize the appreciation of Bitcoin holdings per share; But when the stock price falls near NAV, equity dilution will weaken, rather than strengthen, shareholders' bitcoin positions. The model relies on a self-reinforcing cycle: The share price premium supports fundraising ability The funds raised are used to increase the holdings of Bitcoin Bitcoin overweight strengthens the corporate narrative The narrative value maintains the share price premium If the premium disappears, the cycle will be broken: the cost of financing rises, the overweight of Bitcoin slows, and the narrative value weakens. Bitcoin Reserve Company still enjoys capital market access and investor enthusiasm for now, but its future development will depend on financial discipline, transparency, and the ability to "increase bitcoin holdings per share" rather than simply pile up the total amount of bitcoin. The "option value" that gives these stocks attractiveness in a bull market can quickly turn into a burden in a bear market. Related reports See clearly the essence of Strategy Micro Strategy "crazy buying Bitcoin": it is to engage...