What is the relationship between BTC and Mstr?

The strategy, previously known as Microstrategy, is the largest company holder in Bitcoin. The strategy is currently trading in a double to the net asset value (MNAV) from Bitcoin. The strategy is the software analysis company that transformed its president, Michael Celor, to the Bitcoin Treasury Company. Currently, the company trades with a back to the net value of Bitcoin. The market has always discussed whether MSTR should trade with a discount or in addition to Bitcoin. Historically, it was circulated in a premium, and in recent years, it continued to trade at a premium price.

There are valid reasons for this, such as laws in foreign countries that prevent investors from buying Bitcoin directly or even the investment funds circulated in Bitcoin. Given that most MSTR buyers are looking for Bitcoin’s exposure, the natural question is the extent of MSTR and BTC prices. To study this, I pull the price data on each original daily during 2024. Then calculate the statistical link on the windows from different horizons.

Let’s first check one year window. This means that every day in 2024, I will count the statistical link during the past year. For example, 0.64 is connected on July 1, 2024, that the statistical relationship between BTC-weD and MSTR from July 1, 2023, to July 1, 2024 is 0.64. Below is a conspiracy of BTC and MSTR connection on one year window:

Note that the relationship is definitely higher than scratch, but it is not completely equal. Therefore, there is a positive but not perfect relationship. The relationship is actually narrow, ranging from 0.6 to 0.69, which is a narrow range. There is no general trend throughout the year, although one may say that the link has decreased slightly before half in May. But this decrease is very small in size because it is the difference between 0.61 and 0.64.

Now, let’s think on a shorter horizon than a quarter. We will use the same technology, except for now looking at one quarter of the window. Therefore, the link 0.65 on January 1, 2024 means that the statistical relationship on quarter 4 2023 between BTC and Mstr is 0.65. Below is a graphic draw for this quadruple link for 2024:

Now the discipline is larger, ranges from 0.5 to 0.75. Again, there is no real pattern here except for a slight breakdown at the end of the year. It can be timed with a $ 42 billion capital purchase plan in MSTR in the last quarter of 2024, which was strongly bitten Bitcoin. Many of this reduced the stocks, putting the declining pressure on the price, which will have the effect of breaking the link between BTC-Us and Mstr in the short term.

Let’s now take a look at the month’s link for one month between BTC-Usd and Mstr:

Now we see another example in this direction. As the window shrinks, the contrast increases in the link. Here we see the link ranges from 0.3 to 0.9. Again, there is no general trend throughout the year. The most extreme example of this effect in the rolling window can be seen for one week over the past 2024 between BTC USD, which is here:

In this very short window, the link can be anything, from a decrease -0.8 to approximately 1.0. The weekly link is somewhat prominent because this is what people tend to comment on Twitter/X. They complain that Mstr is no longer moving simultaneously with BTC-Usd.

From the graph above, you can see this is not true. There was no change in the link on a weekly basis during the past year. It was simply very variable. Some weeks are largely linked and some weeks are not at all. The weekly window may prove the basic point, which is that the rights of Bitcoin ownership benefiting from MSTR are not identical to the basic origin price.

While there is definitely a connection that is reflected in the weeks, months and many days in which the weekly, monthly, and even annual links are higher than 0.5 and sometimes close to 1, there are other factors in play. MSTR is a company that has a board of directors, central administration, and the procedures for companies that will affect stock prices, such as stock issuance and bond issuance. All of these factors will affect their price in ways that will not do basic bitcoin.