Author: Jaleel Jia Liu
The summer of 2025 will be the summer of crypto US stocks.
Looking at the capital market, the true protagonists this year are neither Meta nor NVIDIA, nor those traditional technology giants, but the 'strategic holding' US stocks that have brought Bitcoin into listed company balance sheets. This chart clearly illustrates the madness of MicroStrategy.
In the past year, Bitcoin has risen nearly 94%, outperforming the vast majority of traditional assets. In comparison, the gains of technology giants like Meta, NVIDIA, and Tesla are at most around 30%, while companies like Microsoft, Apple, and the S&P 500 index have hovered near 0, even experiencing corrections.
But the stock price of MicroStrategy soared by 208.7%.
Behind MSTR, a large number of crypto holding US and Japanese stocks are showcasing their own valuation myths. The premium of market capitalization / net asset value (mNAV), borrowing rates, short positions, convertible bond arbitrage, and even GameStop-style short squeezes, all brew and collide in the undercurrents of the capital market. Beliefs and structural games intertwine, with institutional and retail sentiments differing—how will traders navigate this new battlefield of 'coin-stock'? What hidden logic is dominating the market?
In this article, Rhythm BlockBeats will dissect the fervor and competition of 'strategic holding' US stocks from the perspectives of three professional traders: from the premium fluctuations of MSTR to the arbitrage battles of new companies, and from the fantasies of retail traders to the calculations of institutions, layer by layer unfolding the new capital narrative cycle.
The Truth Behind 'Strategic Holding' US Stocks
Going long on BTC and shorting MicroStrategy seems to be the viewpoint of many traditional financial institutions and traders.
The first trader interviewed by Rhythm BlockBeats, Longxin Yan, adopted this strategy: 'The implied volatility (IV) of these companies is vastly different. In the OTC market, I buy Bitcoin options using SignalPlus software while selling call options of this company, such as MSTR, when the US stock market opens.'
In Longxin Yan's own words, this is the 'more BTC + short MSTR' volatility scissors strategy, a strategy capable of yielding stable returns.
'This strategy is actually a judgment on the 'premium regression range,' says another trader with a more conservative trading style, Hikari: 'For example, if the current premium is 2 times, and you expect it to drop to 1.5 times, then when the premium falls to that level, you can lock in the price difference to profit. But if market sentiment becomes excessively enthusiastic, pushing the premium up to 2.5 times or 3 times, you may face unrealized losses.'
'Premium' seems to be a word that all traders cannot avoid when mentioning 'strategic holding' US stocks.
The so-called mNAV (Market Net Asset Value) is, in simple terms, the multiple between the company's market capitalization and its actual net asset value of crypto assets.
The popularity of this indicator is almost entirely attributed to the Bitcoin buying frenzy initiated by MicroStrategy (MSTR) in 2020. Since then, the MSTR stock price has been almost tied to the ups and downs of Bitcoin, but the market has consistently valued it far above the company's actual 'net asset value (NAV)'. Today, this mNAV 'premium phenomenon' has also been replicated in an increasing number of crypto assets in the US and Japanese stock markets, such as Metaplanet and SRM. In other words, the capital market is willing to pay these companies far beyond the sum of 'coin value + business assets', and the remaining part is essentially a bet on holding coins, leverage, future financing capability, and imaginative potential.
mNAV premium index, the mirror for MicroStrategy.
Looking back at the trend of MicroStrategy's mNAV premium index. From 2021 to early 2024, the mNAV premium ran long-term between 1.0 to 2.0 times, with a historical average of about 1.3 times—that is to say, the market is willing to pay an average premium of 30% for MSTR's Bitcoin on the books.
However, entering the second half of 2024, MicroStrategy's mNAV premium has hovered around 1.8 times. By the end of 2024, it was even more exaggerated. As Bitcoin continuously approached the $100,000 mark, MSTR's mNAV premium also rose, breaking multiples, reaching a historical peak of 3.3 times on some extreme trading days.
By the first half of 2025, the mNAV index fluctuated in the range of 1.6—1.9 times. It is evident that each change in the premium range corresponds to rounds of capital expectations and fluctuations in speculative sentiment.
In Longxin Yan's words, this is actually similar to the traditional business leverage concept. The market's assessment of these companies' future leverage will affect their premiums: 'MSTR has already raised multiple rounds of financing, with creditors all over Wall Street; this ability to raise funds and issue shares is the core competitiveness. The market expects you to continuously raise money, that's why it dares to give you a higher premium.' In contrast, newly listed 'holding coin US stocks' that are small in scale and new will find it difficult to gain the same trust and premium from the capital market.
What level of premium is considered reasonable?
Butter is a typical believer in quant and data, with all decisions based on historical percentiles and volatility.
'The market's premium for MicroStrategy being 2-3 times is reasonable.' After calculating the changes in Bitcoin and MicroStrategy's stock prices over the past year, Butter stated this.
From early 2024 to March, as Bitcoin surged from around $40,000 to $70,000, an increase of about 75%, MSTR surged from $55 to nearly $180, an increase of over 220%. In this round of increase, MSTR was about three times that of Bitcoin.
By November to December 2024, Bitcoin once again tested the $100,000 mark, this time rising about 33%, while MSTR surged from $280 to around $520, an increase of about 86%, more than twice that of Bitcoin's rise.
However, during the subsequent correction period from December 2024 to February 2025, when Bitcoin fell from $100,000 to $80,000, a decline of about 20%, MSTR's decline was similarly 2 times, with a cumulative decline of about 50%.
Similarly, from March to May of this year, Bitcoin rebounded to around $108,000 with a 35% increase, while MSTR saw an increase of nearly 70%, still around 2 times.
In addition to the premium index, Butter also pays attention to annualized volatility. According to his calculations, the daily return standard deviation of Bitcoin in 2024 is about 4.0%, corresponding to an annualized volatility of about 76.4% under all-weather trading; during the same period, MSTR's daily return standard deviation is about 6.4%, with an annualized volatility of as high as 101.6% on US stock trading days. As of 2025, the annualized volatility of BTC has dropped to about 57.3%, while MSTR remains around 76%.
Therefore, Butter's core opinion is very clear: 'When the premium fluctuates in the range of 1.5-3 times, it is a very clear trading signal.' By combining volatility with mNAV premiums, Butter distilled a 'simplest trading logic'—to go long when the market is low volatility + low premium, and conversely, to short when high volatility + high premium.
Hikari's approach is quite similar to Butter's, but he also combines options strategies for assistance: selling put options for premium income during low premium ranges, and selling call options during high premiums to collect time value. He also reminds ordinary investors: 'Both margin accounts need to be independent. If both sides leverage, it’s easy to get liquidated in extreme market conditions. All heavy positions, leverage, and options arbitrage need to focus on risk management.'
Convertible bond arbitrage is a mature strategy that Wall Street uses to play MSTR.
If premium arbitrage and options trading are the compulsory courses for retail and quantitative players in the 'coin-stock' world, then the real big funds and institutional players care more about the arbitrage space at the convertible bond level.
On October 30, 2024, Michael Saylor officially launched the '21/21 Plan' during an investor conference call: to raise $21 billion in common stock through ATM (At-The-Market) offerings over the next three years to continuously buy Bitcoin. The fact is, in just two months, MicroStrategy completed its first round target—issuing a total of 150 million shares, raising $2.24 billion, and acquiring 27,200 BTC; immediately following, in the first quarter of 2025, the company again raised $21 billion via ATM, simultaneously launching $21 billion in permanent preferred shares and $21 billion in convertible bonds, bringing the total scale of financing tools to as high as $63 billion within six months.
Butter observed that this 'overtime-style' issuance has put substantial pressure on MSTR's stock price. In November 2024, although the stock price briefly surged to $520, as the market's expectations for a new round of dilution changed, the stock price fell all the way down to below $240 by February 2025, nearing the low point of premium during Bitcoin's correction period. Even occasional rebounds are often suppressed by the issuance of preferred shares and convertible bonds. In his view, this is also an important logic behind MSTR's short-term extreme volatility and long-term sustained volatility.
However, for many more institutional hedge funds, the focus is not on betting on the direction of 'up' or 'down', but on capturing volatility through convertible bond arbitrage.
'Convertible bonds typically have higher implied volatility than options with the same expiration date, making them ideal tools for 'volatility arbitrage.' The specific approach is to buy MSTR convertible bonds while borrowing an equivalent amount of common stock for shorting, locking in a net delta exposure of approximately 0. Every time the stock price fluctuates significantly, by adjusting the short position ratio and buying low while selling high, you can harvest volatility as profit.' Butter explained, 'This is one of Wall Street's most mature arbitrage games.'
Behind this, a number of hedge funds are quietly playing Wall Street's most mature arbitrage game using convertible bonds—'Delta neutral, Gamma long.'
He added that MSTR's short interest once reached 14.4%, but many shorts are not 'bearish on the company's fundamentals,' but rather funds engaging in convertible bond arbitrage, using continuous shorting to dynamically hedge their positions. 'They do not care whether Bitcoin rises or falls; as long as the volatility is sufficient, they can repeatedly buy low and sell high to achieve arbitrage price differences,' Butter summarized.
In a sense, MSTR's convertible bonds are also a type of bullish options derivative.
Hikari also has a set of experiences in combining options and convertible bond strategies. He describes buying options as like buying a lottery ticket; occasionally you might hit the jackpot, but most of the time, you're just paying the 'premium tuition' to the market; selling options is like being a lottery shop owner, relying on collecting premiums for a steady income. In his actual trading, options and convertible bonds are powerful tools for diversifying risks and averaging costs.
'Unlike traditional spot or leveraged contracts, the greatest significance of options lies in the 'time dimension.' You can choose different expiration dates of 1 month, 3 months, or 6 months. The implied volatility at different expiration dates varies significantly, creating countless combinations of strategies. This way, regardless of how the market moves, you can always keep risks and returns within your acceptable range.'
This line of thinking is the underlying logic of Wall Street's most mainstream derivative arbitrage. This structured arbitrage is becoming the main battlefield for smart funds on MSTR.
Can we short MicroStrategy now?
However, for ordinary investors and retail traders, this seemingly lively arbitrage feast may not be a cause for celebration. Because when more and more hedge funds and institutions continuously drain the market through 'issuance + arbitrage', ordinary stockholders often become the last buyers: they may not be able to dynamically hedge like professional institutions, nor can they timely identify risks of premium regression and dilution—once the company massively issues new shares or faces extreme market conditions, book profits can quickly evaporate.
Because of this, 'shorting MicroStrategy' has become a hedge choice for many traders and structural funds in recent years. Even if you are a staunch Bitcoin bull, during high premiums and high volatility phases, simply holding MSTR stock may face greater net value drawdown than holding BTC alone. How to hedge risks, or capture the 'regression trend' of MSTR premiums, has become a test that every trader in the 'coin-stock' market must face.
When the topic of shorting MicroStrategy came up, Hikari's attitude became noticeably cautious.
He mentioned that he 'suffered losses' because of shorting MicroStrategy. He candidly stated that he had specifically written a review about it on his public account—last year he started shorting MSTR at the $320 position, only for the market to rise to $550, putting immense pressure on his position.
Although ultimately, when MSTR corrected to over $300, he 'struggled to break even,' he described the pressure of holding through high premiums and bear markets as 'something outsiders find hard to understand.'
This trade completely corrected Hikari's style. He bluntly stated that if he really wants to short now, he would never sell the spot naked or directly sell calls, but would prioritize buying put options (limited risk combinations)—even if the cost is higher, he would no longer recklessly confront the market head-on. 'It's essential to lock the risks firmly within the range you can accept,' he concluded.
But as mentioned earlier and pointed out by Butter, MicroStrategy has significantly expanded its authorization for common and preferred shares in recent years, directly increasing from 330 million shares to over 10 billion shares, while frequently issuing preferred shares, convertible bonds, and continuously engaging in ATM offerings. 'These operations have laid the groundwork for future limitless dilution. Especially with the ongoing ATM issuance and premium arbitrage, as long as the stock price is above net assets, the company management can 'risk-free' buy coins, but it puts continuous pressure on the common stock price to be diluted.'
Especially assuming Bitcoin undergoes a significant correction, this 'high premium financing + continuous coin buying' model will face greater pressure. After all, MicroStrategy's model essentially relies on the market's sustained high premiums and confidence in Bitcoin.
To this end, Butter also mentioned two double inverse ETFs specifically designed to short MicroStrategy: SMST and MSTZ, with expense ratios of 1.29% and 1.05%, respectively: 'But this is more suitable for experienced short-term traders or investors hedging existing positions. It is not suitable for long-term investors because leveraged ETFs have a 'leverage decay' effect, and long-term holding often leads to returns below expectations.'
Will 'holding coin US stocks' resemble a GameStop squeeze?
If shorting MSTR is a risk hedging tool for institutions and veterans, then 'short squeezes' are the ultimate narrative that inevitably arises during every capital market peak. Over the past year, there has been no shortage of institutions openly bearish on MicroStrategy and companies like Metaplanet. Many investors can't help but recall the sensational GameStop short squeeze event on Wall Street—could these crypto US stocks also have the soil to ignite a short squeeze?
On this issue, although the analytical angles differ, the views of the three traders are somewhat similar.
Longxin Yan believes that from the perspective of implied volatility (IV), there is currently no obvious 'overextension' signal for MSTR and similar targets. The greater risk, rather, comes from variables such as policies or taxes disturbing the core logic of premiums. He joked, 'The current short sellers should all go to CRCL.'
Hikari's analysis is even more direct. He believes that giants like MicroStrategy, with a market cap of hundreds of billions of dollars, are unlikely to experience a GameStop-style extreme short squeeze. The reason is simple: the circulating share volume is too large, and liquidity is too strong, making it difficult for retail investors or speculative funds to collectively pry apart the total market cap. 'In contrast, companies like SBET, which initially had a market cap of only several million dollars, are more likely to experience a squeeze.' He added that SBET's movement in May of this year is a typical case—its stock price surged from two or three dollars to $124 in just a few weeks, with its market capitalization skyrocketing nearly forty-fold. Low market cap stocks with insufficient liquidity and scarce borrowing are the most likely candidates for a 'squeeze' market.
Butter also agrees with this statement and explained the two core signals of a 'squeeze market' to Rhythm BlockBeats in more detail: one is an extreme single-day surge in stock price, with the increase entering the top 0.5% of historical percentiles; the other is a sharp decline in the available shares for borrowing in the market, making it almost impossible to borrow stocks, forcing shorts to cover.
'If you find a stock suddenly surging in volume while the number of borrowable stocks is very low and short positions are high, with borrowing rates skyrocketing, this is basically a signal that a short squeeze is brewing.'
Taking MSTR as an example, in June of this year, its total short volume was about 23.82 million shares, accounting for 9.5% of the circulating shares. Historically, in mid-May, it even surged to 27.4 million shares, with short positions accounting for 12-13%. However, from the perspective of financing and borrowing supply, the short squeeze risk for MSTR is not extreme. The current borrowing annualized rate is only 0.36%, with still 3.9 to 4.4 million shares available for borrowing. In other words, although there is considerable short pressure, there is still a long way to go before a real 'short squeeze.'
In stark contrast is the US stock SBET (SharpLink Gaming), which holds ETH. As of now, SBET's borrowing annualized rate is as high as 54.8%, making borrowing stocks extremely difficult and costly. About 8.7% of the circulating shares are short positions, and the entire short position can be covered with just one day’s trading volume. High costs combined with a high short ratio mean that once the market reverses, SBET is likely to experience a typical 'rolling short squeeze.'
Looking at SRM Entertainment (SRM), which holds TRX, it seems even more extreme. Recent data shows that SRM's borrowing annualized cost even reaches 108–129%, with the number of borrowable shares hovering between 600,000 to 1.2 million, and the short ratio approximately at 4.7–5.1%. Although the short ratio is only moderate, the extremely high financing cost directly compresses the shorting space, and once market conditions change, liquidity will bear immense pressure.
As for the US stock DeFi Development Corp. (DFDV), which strategically holds SOL, it once had a borrowing cost as high as 230%, with a short ratio reaching 14%, with nearly one-third of the circulating shares used for shorting. Therefore, overall, while the coin-stock market has the soil for short squeezes, those truly capable of igniting a 'bull-bear game' singularity are often smaller-cap stocks with lower liquidity and higher capital control.
There is only one MicroStrategy in the world.
'For instance, if you have a market value of $10 billion and the market believes you can raise another $20 billion to do business, then a 2 times premium isn't expensive. But if you just went public and your market value is still very small, even if you shout 'I want to raise $500 million' to the heavens, the capital market may not really believe you.' Longxin Yan pointed out the core dividing line for current crypto holding companies—only those that truly grow strong and possess continuous financing and expansion capabilities are qualified to enjoy high premiums in the market. Those limited in scale and newly listed 'small players' find it difficult to replicate MSTR's valuation myth.
Looking back over the past two years, 'strategic holding companies' have gradually clustered in the US stock market—some heavily invested in Bitcoin, some positioned in Ethereum, SOL, BNB, and even HLP and other mainstream assets, and some imitating the MSTR strategy, simply hoping to ride the wave of 'holding coin premiums'.
How do you view the investment logic and market positioning of such companies? Longxin Yan's perspective remains calm: 'This sector is too crowded right now. Just having a 'shell' or hype, without real business and operational support, makes these companies inherently too 'young'. A listed company is not a QQ group; it cannot just be a few people gathered around a table to play the capital game.' He emphasized that the capital market has a set of mature rules and bottom lines. Relying solely on the roughness of Web3 and the enthusiasm of the circle makes it difficult to establish a long-term foothold in the US stock market.
In addition, there are significant pricing differences for such companies in different countries and regions. For example, Japan's Metaplanet is essentially a listed company originating from the hotel industry, now the ninth largest Bitcoin holder globally. Due to Japan's local tax policies being more favorable for holding crypto assets, and many Asian investors being unable to buy coins, companies like MSTR and Metaplanet have even become 'crypto ETFs' in the minds of many. In contrast, some Hong Kong stocks are also trying to allocate crypto assets, but due to fragmented liquidity and insufficient market depth, they cannot enjoy the same benefits as US stocks. Longxin Yan bluntly stated, 'I am not too optimistic about Hong Kong stocks doing this.'
It is undeniable that putting a large amount of Bitcoin on the company's balance sheet is indeed a symbol of strength. However, the 'rules of the game' in the market have not changed—quality companies are few and far between, and most companies are merely chasing a wave of trends and valuation premiums. Once Bitcoin plummets, those companies that have expanded their balance sheets with leverage and lack real business might easily fall into trouble due to exhausted refinancing capabilities, being forced to sell their held Bitcoin at the bottom of the bear market, further exacerbating the downward pressure on the market and triggering a chain reaction, forming a vicious cycle akin to a 'death spiral.'
In a bull market, such companies often exhibit a 'left foot stepping on the right foot' self-reinforcing structure—coin prices rise, holdings appreciate, market capitalization skyrockets, and the market rushes to support, followed by successful refinancing. But in a bear market, everything can reverse, and the entire valuation system can collapse at any time. Longxin Yan's experience is straightforward: 'Do not buy those with high premiums, do not buy those that have recently transitioned, and do not touch those that have raised funds no more than twice—worried that the previous creditors are actually insiders, just like playing dollar bonds with real estate developers.'
During the interview, Hikari's views were similar to Longxin Yan's. He stated that many newly emerged 'strategic holding companies' are essentially replicating MicroStrategy's script—buying coins, financing, and telling stories, relying on 'holding coin premiums' to inflate their market capitalization. Some even originate from the crypto VC and project teams. Hikari candidly admitted, 'Actually, many of these companies are just here to scam money.'
'In fact, the reason MSTR has come this far is that the scale is large enough, and the number of Bitcoins held is sufficient. Going forward, it has many potential plays, such as using these Bitcoins for large-scale pledging, or engaging in complex options strategies to activate its assets. As long as the company is willing to distribute dividends and return these earnings to shareholders, this path can actually continue indefinitely.
He added that apart from MicroStrategy, he is currently only paying attention to a few genuinely asset-disclosing and serious 'holding coin US stocks', such as Japan's Metaplanet and medical equipment company SMLR (Semler Scientific), 'As long as the asset structure is clear enough and the main business is not absurd, such companies are still worth关注.'
As for how the market will change and how strategies will evolve, Longxin Yan, Hikari, and Butter all agree on one point: regardless of how the narrative develops, the most scarce and consensus-driven asset in the crypto market remains Bitcoin.
