MSTR's biggest risk is misjudged: BTC soaring while stock price stagnates is the real hidden danger

Chief Investment Officer Jeff Dorman of Arca recently expressed the view that there is a misperception in the market regarding the risks associated with MicroStrategy (MSTR). Most people worry about MSCI delisting or a decline in Bitcoin prices, but Dorman believes the real risk lies in the phenomenon where Bitcoin prices rise while MSTR stock prices stagnate—a price decoupling. This perspective reveals the deep limitations of MSTR as a Bitcoin proxy tool.

The Risk of Misjudgment

Why MSCI delisting is not the main risk

MSCI delisting has only a minor negative impact on MSTR stock and is insignificant to Bitcoin itself. Although this event may attract market attention, it will not directly undermine MSTR’s fundamentals.

Why a decline in BTC is also not the main risk

MSTR has over two years of cash reserves and no forced sale clauses. This means that even if Bitcoin prices drop sharply, the company will not be forced to sell its Bitcoin assets to meet cash pressures. This ample liquidity buffer is a key safeguard for MSTR.

The True Risk: Price Decoupling

Risk mechanism

If MSTR stops tracking Bitcoin prices and its trading price falls far below its mNAV (market net asset value), a critical consequence occurs: the company cannot raise funds through an ATM (automatic trading mechanism). In this scenario, MSTR faces a dilemma—it would have to consider selling Bitcoin to buy back stock, effectively forcing a liquidation of Bitcoin assets.

Why this is the real threat

The essence of this risk lies in breaking the growth cycle of MSTR. Its operational model depends on the stock price effectively tracking the value of its Bitcoin holdings, enabling continuous fundraising via the ATM to buy more Bitcoin. Once this cycle is broken, the company falls into a passive position.

Deep Insights

This view reflects an important reality: although MSTR is the publicly listed company with the largest Bitcoin exposure, its stock price is influenced by factors far beyond Bitcoin itself. Market sentiment, liquidity premiums, valuation discounts, and other factors can cause the stock price to diverge from its net asset value.

From this perspective, MSTR is not only an amplifier of Bitcoin prices but also a reflector of Bitcoin market risks. When the entire market loses confidence in Bitcoin-related stocks, even if Bitcoin itself is rising, MSTR’s stock price may stagnate. This is the risk Dorman warns about.

Summary

The greatest risk faced by MSTR is not external shocks (such as MSCI delisting) or unidirectional declines (BTC falling), but endogenous price decoupling risk. This reminds investors that holding MSTR does not equate to directly holding Bitcoin; it also involves all the risks associated with the listed company’s stock. While Dorman’s perspective is professional and profound, it also reflects that in the current market environment, even the most aggressive Bitcoin bulls cannot fully avoid the influence of market sentiment.