The Madness, Premiums, and Risks of Crypto US Stocks in 2025

In the summer of 2025, encryption in the US stock market became the main character of the capital market. Compared to traditional tech giants, publicly listed companies that strategically hold tokens performed even better. In the past year, Bitcoin's increase approached 94%, far exceeding most traditional assets. In contrast, MicroStrategy's stock price soared by 208.7%.

After MicroStrategy, a group of cryptocurrency-holding US stocks and Japanese stocks have also staged their own valuation myths. The premium of market value/net asset value (mNAV), borrowing rates, short positions, and convertible bond arbitrage indicators have become the focus of traders' attention. This article will analyze the fervor and game of "strategic holding" US stocks from the perspective of professional traders.

The Truth About "Strategic Holding" in US Stocks

The mNAV premium index has become an important indicator for measuring this type of stock. From 2021 to early 2024, the mNAV premium of MicroStrategy fluctuated between 1.0 to 2.0 times, with a historical average of about 1.3 times. In the second half of 2024, the premium rose to around 1.8 times. By the end of 2024, it even surpassed 3 times, reaching a historical high of 3.3 times on certain trading days.

In the first half of 2025, the mNAV index fluctuated between 1.6 and 1.9 times. Changes in the premium range reflect shifts in capital expectations and speculative sentiment. Some traders believe this is similar to the concept of operational leverage in traditional enterprises, where the market's assessment of these companies' future financing capabilities will affect the premium level.

In terms of volatility, the annualized volatility of Bitcoin in 2024 is approximately 76.4%, while MicroStrategy reaches as high as 101.6%. As we enter 2025, Bitcoin's volatility drops to 57.3%, while MicroStrategy remains around 76%.

Some traders have proposed a simple trading logic: go long when the market has low volatility + low premium, and go short when there is high volatility + high premium. Others combine options strategies, selling put options in low premium ranges to earn premiums, and selling call options at high premiums to collect time value.

For large funds and institutional players, convertible bond arbitrage has become an important strategy. By buying convertible bonds while simultaneously shorting an equivalent amount of common stock, one can achieve "Delta neutral, Gamma long" arbitrage. This is also one of the reasons why some hedge funds frequently short micro strategies.

Can you short MicroStrategy?

For ordinary investors, this arbitrage feast is not a good thing. As more and more institutions "issue additional shares + arbitrage" to extract blood from the market, ordinary stockholders may become the last ones to take over. Therefore, "shorting MicroStrategy" has become a hedging choice for many traders.

But shorting also carries risks. Some traders shorted MicroStrategy at the $320 level, only to see the market surge to $550, creating immense pressure. Therefore, some people suggest using limited-risk methods such as buying put options to short.

The market has also seen the emergence of double inverse ETFs specifically designed to short MicroStrategy, such as SMST and MSTZ. However, these products are more suitable for experienced short-term traders or for hedging existing positions, and are not suitable for long-term investment.

As for whether "holding cryptocurrencies in US stocks" will see a short squeeze similar to GameStop, most analysts believe the likelihood is low. Companies like MicroStrategy with a market capitalization of hundreds of billions of dollars have too large a circulating supply and too strong liquidity, making it difficult for retail investors to impact the overall market value. In contrast, smaller companies are more likely to experience a short squeeze.

The Investment Logic of "Holding Cryptocurrency in US Stocks"

As more and more companies join the "strategic holding" camp, the market has gained a deeper understanding of the investment logic behind these companies. Some analysts believe that only those companies that truly grow strong, have continuous financing, and the ability to expand their balance sheets are qualified to enjoy the market's high premiums. Those limited-scale, newly listed "small players" find it difficult to replicate the valuation myth of micro-strategies.

Different countries and regions have varying pricing for such companies. For example, Japan's Metaplanet benefits from more favorable local tax policies, combined with restrictions on cryptocurrency purchases for Asian investors, making it regarded by some as a "encryption ETF". In contrast, some Hong Kong companies attempting to allocate encryption assets struggle to enjoy premiums similar to US stocks due to dispersed liquidity and insufficient market depth.

It is worth noting that companies of this type perform very differently in bull and bear markets. In a bull market, they often exhibit a "left foot stepping on the right foot" self-reinforcing structure, but everything may reverse once entering a bear market, and the valuation system could collapse at any time. Therefore, some traders suggest being cautious with companies that have high premiums, have recently transformed, or have undergone no more than two rounds of financing.

Overall, although "strategic holding" of US stocks has attracted a lot of attention, market participants still need to remain cautious. Ultimately, the most scarce and widely recognized asset in the encryption market remains Bitcoin itself.