MicroStrategy’s Strategy Will Work … Until It Doesn’t
MicroStrategy’s Strategy Will Work … Until It Doesn’t
Why IBIT beats MSTR for Bitcoin exposure, silver catches up to gold, and fresh trade ideas on FSLR and crude oil amid surging volatility.
Last week in Cherry Picks we covered IBIT, the spot bitcoin exchange-traded fund (ETF), and explained why we prefer it to older vehicles like BITO. Now it’s time to talk about MicroStrategy (MSTR), a stock some traders still use to get bitcoin exposure. It actually just changed its name to “Strategy,” probably because “MicroStrategy” was too honest about the size of its software business.
The company’s executives have decided to stop selling software and instead become a bitcoin holding company. The entire strategy boils down to this: Issue equity and debt, use the proceeds to buy bitcoin and let the stock trade at a premium. It is financial engineering.
It trades at a premium. I took these stats from their website:
Bitcoin owned: ₿592,100
Bitcoin NAV: $63.6 billion
Market cap: $106.9 billion
mNAV (Market cap / NAV): 1.86
That means you're paying $1.86 for every $1.00 of bitcoin the company holds.
That is wildly inefficient. You’re not getting more bitcoin exposure by buying MSTR. You’re just paying extra for someone else’s leverage and hoping they don’t mismanage it.
Meanwhile, IBIT trades near NAV, gives you spot bitcoin exposure and now has listed options, too.
You don’t need MSTR.
Gold/Silver Ratio Coming Back in Line
Since the beginning of 2025, gold significantly outperformed silver, pushing the gold/silver ratio to multi-year highs above 105 early this year. This spike reflected gold’s increase.
However, in recent weeks, silver has staged a notable rally, outpacing gold’s gains. As a result, the gold/silver ratio has fallen back to around 94 as of mid-June 2025.
That said, silver is still “cheap” compared to the historical gold/silver ratio — although less than it was a few weeks ago.
Trade silver with the silver ETF (SLV); and trade gold with the gold ETF (GLD).
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Two trade ideas
FSLR ($143.42) short put (JUL) $4.45 credit
Solar stocks have really taken a hit today. First Solar (FSLR) is down 18% today with vol expanding, and Enphase Energy (ENPH) is down 25%. If you think it might still stay above 52-week lows ($116), selling the 125 short put nets $4.45 credit at around 20 delta, with a breakeven down around $120.
/CLQ5 ($72.14) broken wing butterfly (JUL17) $0.11 credit
Crude oil volatility has absolutely exploded into the recent events in the middle east. IVR sits at 120, indicating volatility expanding above the high of the last year. "OVX:CGI" is the Cboe volatility index for /CL, hitting 66 this morning. A broken wing butterfly plays into the upside skew — buying the 80 call, selling 2x the 83 calls, and buying 1x the 88 calls for $0.11 credit ($110) is a way to play into the skew with no risk to the downside.
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Michael Rechenthin, Ph.D., (aka “Dr. Data”), managing director of research and development, has 25 years of trading and markets experience. He’s known best for his weekly Cherry Picks newsletter. On Thursdays, he appears on Trades from the Research Team LIVE.
Nick Battista, tastylive director of market intelligence, has a decade of trading experience. He appears Monday-Friday on Options Trading Concepts Live. On Wednesdays, he co-hosts Johnny Trades. @tradernickybat
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