MicroStrategy Bitcoin Buying Pace Slows 50% Amid Stock Premium Decline

Strategy, formerly known as MicroStrategy, has been continuously accumulating Bitcoin, but the pace of this accumulation has notably slowed down compared to its peak in November last year. According to a report by K33 Research Director Vetle Lunde, this deceleration can be attributed to two primary factors: a decline in the premium of Strategy's Class A common stock (MSTR) relative to its Bitcoin holdings, and intensified competition among corporations hoarding Bitcoin.

From May 19th to 25th, Strategy acquired 4,020 Bitcoins at an average price of $106,237, totaling approximately $4.271 billion. Of this amount, $3.487 billion was sourced from its latest $21 billion ATM (At-the-Market) financing plan. This figure represents a significant decrease from the previous week's $0.705 billion and the $1.31 billion recorded from May 5th to 11th.

Lunde noted that the utilization speed of the new $21 billion ATM plan is considerably slower than the first $21 billion plan. Between November 4th and December 16th of last year, MSTR averaged $2.13 billion in ATM financing per week. In contrast, the average over the last three weeks has been only $0.788 billion. The emergence of other companies announcing Bitcoin reserves has provided additional choices for investors, potentially diverting some demand away from MSTR.

As Strategy's Bitcoin holdings appreciate, maintaining a net asset premium that is double the previous level requires stronger buying support. Lunde highlighted that last week, particularly on Friday, the premium of MSTR relative to its Bitcoin holdings plummeted from 185% to 163%, reaching a new low since April 8th. Aggressive issuance has accelerated the contraction of this premium, possibly forcing Strategy to slow down the pace of ATM financing. The scenario where large-scale issuance could drive up the premium, as seen in November last year, may be challenging to replicate.