The Frenzy and Game of Encryption in US Stocks: Premiums, Arbitrage, and Risks

In the summer of 2025, the encryption boom in the US stock market swept through the capital markets. Compared to traditional tech giants, the "strategic holding of coins" in US stocks that included Bitcoin on their balance sheets became the real protagonist. The stock price of MicroStrategy ( MSTR ) surged by 208.7%, far exceeding that of other tech companies.

In this new capital narrative, indicators such as the mNAV premium index, borrowing rates, and short positions have become the focus of traders. From the premium fluctuations of MSTR to the arbitrage battles of emerging companies, and from the fantasies of retail investors to the calculations of institutions, a complex game is unfolding.

The Truth About "Strategic Holding" Stocks in the US

Many traders adopt the strategy of "long BTC, short MSTR" to obtain stable profits through volatility arbitrage. The mNAV premium has become a key indicator, reflecting the market's expectations of the company's holding, leverage, and financing capabilities.

The mNAV premium of MSTR has fluctuated long-term between 1.0 and 2.0 times, breaking through 3 times at the end of 2024. Traders generally believe that the range of 1.5 to 3 times is a reasonable trading signal. Going long at low premiums and shorting at high premiums has become a simple and effective strategy.

For institutional investors, convertible bond arbitrage is a more mature game. Through the "Delta neutral, Gamma long" strategy, hedge funds can continuously arbitrage using MSTR's high volatility.

The Risks and Opportunities of Shorting MicroStrategy

Although shorting MSTR seems like a hedge against risk, the actual operation carries considerable risk. Some traders, after suffering losses, prefer to use options combinations with limited risk.

Currently, there are two double inverse ETFs, SMST and MSTZ, that short MSTR in the market, but they are more suitable for experienced short-term traders.

As for extreme short squeezes similar to GameStop, it is difficult to occur in large-cap companies like MSTR. Small-cap, low-liquidity "coin stocks" are more likely to trigger long-short games.

The Future of the "Coin-Stock" Craze

Compared to MSTR, most new "strategic holding" companies find it difficult to gain the same level of market trust. Companies that lack real business support and have limited financing capabilities struggle to replicate MSTR's valuation myth.

Professional traders generally believe that in the future, only a few assets with clear structures and stable main operations, such as "holding US stocks", are worth paying attention to. Regardless of how the market changes, Bitcoin remains the most consensus-driven scarce asset in the encryption field.