Bybit Report Suggests MSTR Stock Undervalued by 17.9%

Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has released a new Bybit TradFi x Crypto Report on Strategy (NASDAQ: MSTR), the BTC-focused holding company formerly known as MicroStrategy. The analysis revealed a complex valuation picture that challenges traditional pricing logic while highlighting the company's unprecedented position in the BTC ecosystem.

The report suggests that investors should disregard the company’s legacy software operations and examine its true value as a high-beta proxy for its underlying asset, BTC. Holding over half a million BTC, which represents about 2.8% of BTC’s total supply, Strategy is currently trading at a 68% premium to the net value of its BTC treasury at a $107 billion market cap.

Key findings from the report include quantitative data suggesting undervaluation. A statistical analysis of the historical relationship between BTC and MSTR performance indicates a potential fair value of $468 per share, suggesting the stock may be undervalued by approximately 17.9% at current trading levels of $384. Additionally, the report highlights Strategy's conservative leverage management, maintaining a prudent loan-to-value ratio of just 11.46%, providing a substantial cushion against market volatility and default risk. However, the company has yet to face a real stress test in the case of a major unexpected BTC correction.

The analysis also cautions that Strategy's valuation premium is likely unique and inimitable, stemming from its first-mover advantage and singular focus on BTC accumulation versus other corporate holders who maintain crypto as non-core treasury assets. The report notes that Strategy's transformation has created an entirely new asset class in equity markets, providing value in institutional BTC exposure instead of sales revenue. The analysis also suggests that while the company presents significant upside potential in favorable BTC markets, its leveraged structure equally amplifies downside risk.

The complete analysis is available on Bybit Learn.