Volatility of btc vs MSTR

Key Points

  • Research suggests MSTR has higher volatility than BTC, with recent data showing MSTR at 22.14% compared to BTC at 17.13%.
  • It seems likely that MSTR’s volatility is about 2 to 2.5 times that of BTC, based on CEO statements and market analyses.
  • The evidence leans toward MSTR being riskier due to its leveraged exposure to Bitcoin, impacting price fluctuations more significantly.

Volatility Comparison

MSTR, or MicroStrategy, is a company heavily invested in Bitcoin, and its stock price tends to be more volatile than Bitcoin itself. Recent analyses, such as from Portfoliolab, indicate MSTR’s volatility at 22.14% annualized, compared to BTC’s 17.13%. This suggests MSTR experiences larger price swings, making it riskier for investors.

CEO Insights and Market Perception

Michael Saylor, CEO of MicroStrategy, has stated that MSTR’s volatility is approximately twice that of Bitcoin, which aligns with market observations. This higher volatility is partly due to MSTR’s leveraged strategy, using debt and equity to acquire more Bitcoin, amplifying price movements.

Unexpected Detail: Leverage Impact

An interesting aspect is that MSTR’s volatility isn’t just tied to Bitcoin’s price but is also influenced by its business operations and market sentiment, creating a complex risk profile not fully mirrored by BTC.

Survey Note: Detailed Analysis of MSTR vs. BTC Volatility

This note provides a comprehensive examination of the volatility comparison between MicroStrategy (MSTR) stock and Bitcoin (BTC), drawing from recent data and market analyses as of March 4, 2025. Volatility, defined as the degree of variation in trading prices over time, is a critical metric for investors assessing risk. Here, we explore historical data, correlation, beta, and expert insights to understand the relative volatility and its implications.

Background and Context

MicroStrategy, a company known for its business intelligence software, has pivoted significantly toward Bitcoin, holding substantial amounts as part of its treasury strategy. This shift, led by CEO Michael Saylor, has made MSTR a proxy for Bitcoin exposure, but with added layers of risk due to its corporate structure and financial strategies. Bitcoin, as a cryptocurrency, is inherently volatile, but its volatility has shown a declining trend over recent years, as noted in analyses from iShares – Blackrock. However, MSTR’s volatility appears to exceed BTC’s, driven by leverage and market dynamics.

Volatility Metrics: Quantitative Comparison

Recent data from Portfoliolab, published on February 23, 2025, provides a direct comparison:

  • MSTR volatility: 22.14% (annualized standard deviation of daily returns).
  • BTC volatility: 17.13% (annualized standard deviation of daily returns).

Another dataset from the same source, dated August 17, 2024, shows:

  • BTC volatility: 10.40%.
  • MSTR volatility: 18.49%.

These figures suggest MSTR consistently exhibits higher volatility, with variations possibly due to different time periods analyzed. The discrepancy highlights the importance of context, as market conditions can affect volatility measurements.

AssetVolatility (Recent, %)Source Date
MSTR22.14February 23, 2025
BTC17.13February 23, 2025
MSTR18.49August 17, 2024
BTC10.40August 17, 2024

This table underscores MSTR’s higher volatility, with a notable gap, especially in the more recent data.

CEO Statement and Market Observations

Michael Saylor’s statement, referenced in an X post by r/MSTR, claims MSTR’s volatility is twice that of Bitcoin. This aligns with Coindesk reporting MSTR’s volatility outpacing BTC by 2.5 times, based on a 30-day implied volatility (IV) of 140.86% for MSTR versus BTC’s lower figure. Such statements suggest a leveraged effect, where MSTR’s financial strategies, including debt issuance for Bitcoin purchases, amplify price movements.

Correlation and Beta Analysis

Correlation between MSTR and BTC varies by source. Portfoliolab reports a low correlation of 0.20, suggesting price changes are not closely related, which might seem counterintuitive given MSTR’s Bitcoin holdings. However, Coindesk cites a 65% correlation using 12 months of daily closing price data, indicating a moderate to high relationship. This discrepancy may reflect different time frames or methodologies.

Beta, a measure of volatility relative to a benchmark, is less straightforward for BTC as it’s not a stock. For MSTR, Yahoo Finance lists a 5-year monthly beta of 3.37 against the market, indicating high volatility. Analyzing the Correlation Between MicroStrategy’s Stock and Bitcoin suggests MSTR’s beta relative to BTC is around 1.10 to 1.14 over recent periods, implying it moves slightly more than BTC, supporting the volatility gap.

Leverage and Operational Factors

MSTR’s volatility is not solely tied to BTC’s price. Its strategy involves issuing convertible bonds and equity to buy more Bitcoin, as noted in The math behind MicroStrategy’s bitcoin bet. This leverage creates a 2.5x volatility effect compared to BTC, according to Coindesk. Additionally, MSTR’s business intelligence operations and market sentiment, as discussed in Strategy vs Bitcoin, add further volatility, making it a complex investment vehicle.

Implications for Investors

For investors, MSTR’s higher volatility means greater potential returns but also increased risk, especially in bear markets. Seeking Alpha notes MSTR moves 1.5 times more in the same direction as BTC, suggesting amplified gains in bull markets but sharper declines otherwise. This aligns with Reddit discussions, such as r/MSTR, where users observe MSTR moving 2x BTC up and down, reflecting leverage risks.

Conclusion

Based on the data, MSTR exhibits higher volatility than BTC, with recent figures suggesting a range of 18.49% to 22.14% for MSTR versus 10.40% to 17.13% for BTC. CEO statements and market analyses reinforce this, with MSTR’s volatility estimated at 2 to 2.5 times that of BTC due to leverage and operational factors. This makes MSTR a riskier but potentially more rewarding investment compared to direct BTC exposure.

Key Citations

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