A recent report from 10x Research, led by analyst Markus Thielen, who correctly predicted this year's BTC rally, warns early investors in MicroStrategy (MSTR) to consider taking profits.
Analyst Warns MicroStrategy Shares Are Overvalued by 26%
According to research, the Regression model shows MicroStrategy is currently overvalued by +26%, indicating a potential downside of around 20% based on current Bitcoin prices.
In light of this analysis, 10x Research suggests that this may be a good time for investors to hedge their gains.
Shares of MicroStrategy have enjoyed a remarkable run this year, quadrupling in value and hitting a 25-month high of $673.
The Nasdaq-listed company is considered one of the standout performers among crypto-related stocks in 2023.
MicroStrategy has been strategically accumulating Bitcoin as a reserve asset for the past three years and currently holds 189,150 BTC.
The analysis highlights the relationship between Bitcoin's performance and MicroStrategy's stock value.
The upward sloping best fit line in the regression model shows a positive correlation, indicating that as the price of Bitcoin increases, the market cap of MSTR also increases.
The performance of stocks like MicroStrategy and Coinbase alongside Bitcoin is often considered an indicator of institutional interest in digital assets.
These stocks provide market participants with indirect access to the crypto space without directly owning cryptocurrencies.
*This is not investment advice.