MicroStrategy's shares have increased by 488% in 2023. However, Adam Back, CEO of Blockstream, believes they remain significantly undervalued due to the company's substantial Bitcoin holdings.
Adam Back Criticizes Short-Selling Strategy
Back expressed confidence that short-sellers targeting MicroStrategy stock could face substantial losses. He noted that efforts to short the stock, while accurately reflecting its Bitcoin holdings, are doomed to fail. Back believes that buying MicroStrategy shares presents a lower risk compared to more complex financial products like leveraged Bitcoin ETFs, which often lose value due to compounding effects during market stagnation.
Bitcoin ETFs Face Challenges
Unlike MicroStrategy, Bitcoin ETFs are prone to 'decay' issues due to price fluctuations and daily rebalancing. This makes them less attractive choices for Bitcoin investment. Back also compared them to Bitcoin options, which often expire worthless if market timing is incorrect.
MSTR Gains Amid Bitcoin Volatility
The Virginia-based firm saw its shares rise nearly 12% last Friday, reflecting continued investor interest. The company's strategy of holding Bitcoin as a primary treasury asset makes it a unique vehicle for Bitcoin investment. Back remains confident that MicroStrategy is a reliable choice for investors assessing Bitcoin's long-term potential.
Back remains confident that MicroStrategy’s stock will outperform short-sellers expectations.
