Institutional Sell-off Wave Approaching? MicroStrategy Stock Price Halved from Peak, Grayscale Bitcoin Trust Discount Widens to 13.5%

The Nasdaq-listed company MicroStrategy, known for its large purchases of Bitcoin, has dropped by 50% after hitting a historical high of $1,315, while the discount rate of the Grayscale Bitcoin Trust has also widened to 13.5%. Is this a warning sign of institutions exiting?

MicroStrategy Stock Price Halved

Since early February, MicroStrategy's stock price has fallen significantly along with Bitcoin. According to Nasdaq data, MSTR closed at $1,272.94 on February 9 and hit a record high of $1,315 on the same day.

Unfortunately, the four-digit high did not last long before plummeting, with MSTR closing at $645.66 on Thursday. This marks a 50.9% drop from the trading high on February 9. As the company holds most of its reserves in the form of Bitcoin (MicroStrategy's total Bitcoin holdings are 90,859 BTC, worth approximately $4.36 billion), MSTR's price performance is closely linked to Bitcoin.

Institutional Investors Decreasing Positions?

Since the beginning of March, with MSTR's sharp decline and Bitcoin's weak price performance, many believe that the possible reason is the fading Bitcoin frenzy on Wall Street, with U.S. institutional investors reducing their Bitcoin holdings. According to previous reports, Grayscale's Bitcoin Trust Fund (GBTC) premium turned negative at the end of February, the first time in five years. It is noteworthy that since then, the frequency and magnitude of GBTC discounts have been increasing. According to data on the Grayscale website, the current GBTC premium relative to Bitcoin has reached -13.5%.

While this situation may be a temporary phenomenon caused by Bitcoin retracement and increased GBTC supply, investors should continue to monitor the trend changes in the discount rate.