K33: MSTR's premium over Bitcoin Holdings has decreased, and competition among peers has led to a slowdown in Strategy's accumulation.

Gate News bot message, Strategy (formerly known as MicroStrategy) has continued to buy Bitcoin in large quantities over the past few weeks, although the pace of accumulation has slowed compared to the peak in November last year.

K33 Research Director Vetle Lunde pointed out in a report on Tuesday that the slowdown may be due to the decline in the premium of Strategy's Class A common stock MSTR relative to its holdings of Bitcoin, as well as increased competition for corporate capital accumulation.

On Monday, Strategy announced that from May 19 to May 25, it spent approximately 427.1 million dollars to repurchase 4,020 Bitcoins at an average price of 106,237 dollars. Lunde pointed out that the funds raised from Strategy's latest 21 billion dollar MSTR ATM (issued at market price) project accounted for 348.7 million dollars of the funds raised for this acquisition, which is lower than the previous week's 705.7 million dollars and the 1.31 billion dollars from May 5 to May 11.

He explained that, "Overall, the utilization rate of the newly issued $21 billion ATM bonds is far lower than that of the first $21 billion ATM bonds. During the seven weeks from November 4 to December 16, MSTR raised an average of $2.13 billion through ATM bonds, while in the past three weeks, the average weekly funds raised through ATM bonds were $788 million."

At the same time, new corporate financial plans involving Bitcoin seem to be emerging every week. Currently, more than 70 companies have adopted some form of Bitcoin finance, with Twenty One and Nakamoto recently joining the ranks of companies like Metaplanet, Semler Scientific, and KULR by adopting the Bitcoin acquisition model pioneered by Strategy and its co-founder Michael Saylor. On Tuesday, Trump Media Technology Group became the latest company to launch a corporate Bitcoin finance strategy, which was privately placed with about 50 institutional investors for $2.5 billion.

Lunde said: "This provides traders with more options to purchase equity in such companies, which may dampen some of the demand for MSTR itself."

In addition, as the value of Bitcoin held by Strategy continues to grow, maintaining a premium that is twice its previous net asset value requires increasing demand from investors.

Lunde added: "In the past week, especially on Friday, MSTR's market premium relative to its Bitcoin holdings has dropped sharply from 185% to 163%, with the premium falling to its lowest level since April 8. Aggressive dilution has accelerated the contraction of the premium, which may force MSTR to adopt a more moderate ATM premium increase than in November, when even large issuances could still drive up the premium's frenzy, which is unlikely to be seen again."

He also pointed out: "Despite the historical high trading price of Bitcoin, signs of excitement in the derivatives and spot markets are still not obvious, and currently may only be reflected in BTC fund management companies, which are currently in high demand. That said, apart from MSTR, most of these fund management companies occupy only a relatively small share in the global BTC market, and we believe they will not pose a significant potential threat to the strong momentum of BTC."

Source: The Block