Where’s the Kaboom? MSTR Model Update
Many expected fireworks after the 17 January options expiry, the US presidential inauguration and a Strategic Bitcoin Reserve announcement.
But MSTR continues to chug along near the bottom of the fair value range, fueling up on more BTC, waiting for the next ballistic boom when the stars align.
MSTR: Where Are We Now?
As shown in the chart and the table below, MSTR is volatile, with large swings around fair value.
MSTR's Ballistic Model Keeps Getting Stronger
While all models are wrong, some are useful.
Our interactive ballistic model shows we're entering uncharted territory, with BTC hitting new ATHs again.
We can't predict the future perfectly, but the ballistic model becomes more robust with more data to predict MSTR's relentless delivery on their #1 KPI—compounding BTC Yield. The robustness of our model should instil confidence in its predictions, at least in the medium term.
The second-order polynomial relationship between BTC and MSTR in the log-log space has increased in strength since May 2023.
Fueling Growth: The Latest BTC Yield Stats
MSTR added another 11,000 BTC to its stack this week, maintaining its ballistic trajectory. Its BTC Yield is 0.28% per day, 1.95% per week, or 174% per year.
BTC's Future: What the Trends Are Telling Us
BTC continues to be volatile in the short term, but when we zoom out, it continues to run ahead of the long-term power law and its traditional halving cycle trend.
Bitcoin is Thirtsy for Liquidity
After trending down since October, global liquidity has increased over the past few days, which is great for BTC, which is often viewed as a risk asset and absorbs any new money in the system. The US Dollar (DXY) is also coming off its highs.
The fact that BTC has continued upward despite the contraction in liquidity over the past four months is a sign that it is becoming viewed as a store of wealth (risk-off) rather than a speculative trade (risk-on), but liquidity still plays a role.
The previous US administration has tried to keep the debt ceiling low for the past few years. But now they're out of money, and something has to give—either massive cuts to US spending or some form of printer go brrrrr (or a bit of both).
Bitcoin's Power Law Trend: The Big Picture"
While it's impossible to predict where BTC will go in the short term, the long-term log-log trend between time and Bitcoin remains intact.
Interestingly, the power law trend has continued to steepen since early 2024 when the ETFs came online.
BTC's Impact on MSTR's Rising Share Value
With or without the Stratic Bitcoin Reserve or $TRUMP coin, BTC will continue to eat global capital wealth over the long term, fueling MSTR's increase in BTC Per Share.
Reducing the legal and accounting barriers to crypto will mean more individuals, companies, states, and countries will move their capital into BTC in the coming months and years.
MSTR Multiple of Net Asset Value Trend
MSTR's mNAV will also likely continue to trend up to levels beyond many people's expectations as it becomes seen as not just a BTC holding company but a BTC Refinery and then potentially a BTC Bank, controlling the future of hard money as more people wake up and realise that everything else — meme coins or fiat currency — is melting against hard money.
How Big Can MSTR's BTC Stack Get?
Based on MSTR's current ballistic trajectory, its BTC stack is projected to grow significantly by the end of 2025, potentially reaching a market cap of $2.5T. This growth could see MSTR own a massive amount of BTC, possibly in the order of two million coins.
Unfortunately, it's impossible to model BTC's finite scarcity, especially once the bigger boys start to compete. If we assume that it's not realistic for MSTR to own 10% of the available BTC this year, then the other scenarios are:
· mNAV rises much more than shown in the chart above and/or
· MSTR drives up the BTC price with its ferocious buying on its mission to transfer global wealth into the hardest money and kill the traditional halving cycles.
All my models will be broken, but it's hard to see a bad scenario for MSTR's long-term shareholders.
Where Is MSTR Headed? Insights for the Year Ahead
So what's in store for 2025?
Everything depends on BTC, which will be impacted by global liquidity and companies' and countries' adoption of BTC, so there is no crystal ball.
The chart below shows where we could be headed if the cycles repeat and BTC reaches $265k at the 99th quantile in October 2025.
It's wise not to put too much stock in individual events to move the price overnight, but I've shown some milestones worth paying attention to (inspired by Grain of Salt in the last MSTR True North call).
Q4 Earnings Call
MSTR's Q4 earnings call will likely occur in early February (date yet to be announced). Saylor will undoubtedly share some exciting news, such as plans to roll out more convertible debt and preferred shares rather than relying so much on the ATM to raise funds.
Tax Day Speed Bump
Because they consider the annual cycle, my model highlights a pullback in BTC before US Tax Day (15 April 2025). According to Grain of Salt, Wall Street traders pay their taxes, derisk, and take extra profits for their holiday in the Hamptons.
The chart below shows how Bitcoin's price oscillates around the power law trend in years with a US presidential inauguration. Hence, it might be wise not to be overleveraged in the lead-up to 10 April this year. It might even be a good time to protect profits with covered calls if you're into that sort of thing.
Onward and Upwards
The Q1 earnings in May 2025 will be the first time MSTR can show its BTC profits with the new FASB accounting rules, which may pave the way for S&P500 inclusion in the lead-up to the traditional cycle peak.
Our final chart shows this on a standard price scale, showing some crazy volatility. Obviously, this will be wrong (all models are), but it gives us a flashlight in the dark to show us where things might be going for MSTR this year.
It's going to be bumpy — remember, volatility = vitality — but it could be fun.
Where do you see MSTR and Bitcoin heading in 2025? Do you think the liquidity cycle will outshine the halving in importance? In the long term, how much does the Strategic Bitcoin Reserve matter? Drop your thoughts, predictions, or questions in the comments below.