COINOTAG reported on May 28th that Strategy, previously known as MicroStrategy, has notably altered its accumulation strategy for Bitcoin. The acceleration of its purchases has significantly decelerated since a peak observed in November 2022. According to a recent analysis by K33 Research Director Vetle Lunde, two pivotal factors contribute to this slowdown. Firstly, the premium of Strategy’s Class A common stock, MSTR, in relation to its Bitcoin assets has diminished. Secondly, the competition among corporations in acquiring Bitcoin has intensified.
From May 19th to 25th, Strategy acquired 4,020 Bitcoins at an average cost of $106,237, totaling around $4.271 billion, primarily funded through a recent $21 billion ATM financing initiative. This expenditure marks a substantial decrease compared to the previous weeks. Lunde emphasizes that the utilization rate of the new ATM plan is approximately half of prior levels. Competing firms have also introduced alternative Bitcoin reserve options, which could siphon demand away from MSTR.
Furthermore, as Strategy’s Bitcoin assets rise in value, the necessity for robust purchasing support to sustain a favorable net asset premium becomes critical. A significant drop in MSTR’s premium—from 185% to 163% as noted last Friday—indicates mounting pressure. Increased issuance rates could further restrict the premium, complicating the potential for a resurgence similar to that witnessed last November.