In a recent report released by 10x Research, the company has raised concerns about the overvaluation of MicroStrategy Inc (NASDAQ: MSTR) shares. The research was led by Markus Thielen, the analyst who accurately predicted this year’s Bitcoin (BTC) rally.
According to him, despite MSTR’s impressive 343% surge this year, the business intelligence company is currently overvalued by 26%. This prediction was based on the 10x Research regression model, which analyzes the relationship between MSTR and Bitcoin’s spot price.
Analysts Warns Investors to Take Profit
The regression model used by 10x indicates that MicroStrategy is currently +26% overvalued, with a potential 20% downside given the prevailing BTC prices.
In light of their findings, 10x advised investors to consider taking profit and reduce long positions. While highlighting that HIVE, HUT, and GALAXY still offer value, the company underscores that substantial gains may have already been realized in these stocks.
“As the regression model shows, MicroStrategy is +26% overvalued and has a 20% downside based on the current Bitcoin prices. It is time to take profit,” 10x said. The business intelligence company saw its shares skyrocket on December 27, 2023, quadrupling in value this year and reaching a 25-month high of $673.
As one of the standout performers in the crypto-related stocks of 2023, MicroStrategy presently holds 189,150 of BTCs after its recent purchase this week. The company started accumulating the crypto asset three years ago as a reserve asset.
This year, the king coin experienced a 160% gain following the bear market last year with a remarkable 60% surge in the current quarter, largely driven by the spot ETF narrative.
MicroStrategy May Likely Purchase More Bitcoins
The new 10x’s research extends beyond MicroStrategy, highlighting that several crypto-related stocks are trading close to fair value based on BTC’s price.
The crypto asset is currently trading at $43,164 at press time according to CoinMarketCap data.
The company said the performance of such stocks, including MicroStrategy and Coinbase, is often considered a barometer for institutional interest in digital assets, offering market participants exposure without direct ownership.
Meanwhile, in a separate post on X formerly Twitter, Max Keiser, an influential BTC advocate and advisor to the president of El Salvador said that MicroStrategy is planning to raise funds by offering a combination of both debt securities and equity to potential investors.
SOURCE: $MSTR is prepping a $5 billion mixed debt & equity shelf offering.
Another 100,000 #Bitcoin buy?
— Max Keiser (@maxkeiser) December 27, 2023
He believes the company may be considering increasing its BTC holdings with additional purchases.
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