Tech stocks linked to Bitcoin staged a modest comeback in overnight trading, although it wasn’t enough to wipe away the losses they suffered yesterday. The market remains on edge as Bitcoin has lost 21% over the past month. In recent days, it has stabilized at around $87K per coin and was up 0.72% today. Crypto trading platform Coinbase was down 4.76% yesterday but was up 1.37% in overnight trading, while Robinhood was down 4.09% yesterday and then crept up 0.63% this morning, premarket. But the elephant in the digital asset room is Michael Saylor’s Strategy, the leading Bitcoin treasury company, whose stock market cap is now worth less than the Bitcoin it holds. It dropped 3.25% yesterday but was up 0.45% before the bell. Strategy’s market cap was $50.6 billion at the time of writing, and its 650,000 Bitcoins were worth $56.7 billion. The key metric for Strategy, however, is its “mNAV” (multiple to net asset value), which is a ratio describing the company’s theoretical enterprise value (currently $65.2 billion) to its Bitcoin holdings. That ratio was 1.15 this morning, meaning its enterprise value is worth 15% more than its Bitcoin.
However, if the mNAV falls below one, then Strategy faces a crisis: The reason for holding the stock vanishes, and no one will be likely to provide the company with more capital—a period of fierce selling could ensue.
