Jacked to the Tits Short MSTR (Patreon)

I'd love to get everyone's thoughts on this, as this seems like one of the most obviously good trades I've seen in a while.  

Full disclosure: I'm short MSTR right now, but not levered to the tits.

Update: while writing this post I got jacked to the tits in 40k short MSTR 40k long BTC as a hedge. Lfgo time to gamble.

Trade Overview

• MSTR is currently the largest corporate holder of spot BTC. Its value is made up primarily of 193000 Bitcoin
• The stock has always been a Bitcoin proxy for trad fi people to get easy exposure. This is likely why we're seeing the stock go up massively in this recent bull run
• MSTR currently has a short interest of ~20%, which could possibly be contributing to some of the squeezy price movement we're seeing. Reading the following post on Reddit makes me think a lot of big people are short this, and empirically high short interest is very predictive of future returns (but also massive short term squeezy upward momentum). I'm guessing a lot of other people are in this trade 
• MSTR does have a software business, however its NAV is roughly equivalent to the value of the Bitcoin it's holding. Btc is a currency and doesn't have future earnings, which is why NAV is an ok way to estimate the value of it

The stock is currently trading at a 120% premium to the value of the Bitcoin it holds. 

To reiterate: if you buy this company to get Bitcoin exposure, you're paying a 120% premium above the fair value of the Bitcoin it holds to be long. That is fuken ridonculous. 

I found this trade after seeing MSTR flying yesterday and wondering why there appeared to be a break in the correlation between BTC and MSTR. I then came across this Reddit post.

I'd recommend looking through it if you're interested in this trade. 

This is the dude on Reddit's model of MSTR's fair price. 

Below is a time series of the Microstrategy stock premium. If that isn't a stationary time series, I'll cut off my own hand, cook it in a frying pan and eat it. 

 Calculation of the premium is below if you want to calculate it for a longer window

Important Risks 

The biggest risk here is obviously: "The market can remain irrational longer than you can remain solvent." 

I was tits long half the crypto universe until this morning, and as far as I'm concerned that signal was WAY stronger than any "bUt ItS tRaDiNg aBoVe NaV!" argument. 

However, when I see the shitcoins mooning, that's when I start to get more bearish crypto on a monthly/quarterly timeframe. 

Structuring a Trade

If we believe the spread is gonna normalize back to something reasonable, we could go long BTC short MSTR to isolate the premium without being exposed to any directional movement in BTC. 

However I think it's a fair assumption to say the premium is highly correlated with the spot crypto market. IE, if Bitcoin continues flying we're gonna get absolutely fucking demolished even if we're hedged in the position long BTC. 

Knowing this, I'm gonna carefully monitor each leg and rebalance this position as our risk changes. The idea is to stay as neutral to spot BTC as possible.

I just wanted to post this now, but I'll post an update soon with some more details of this rebalancing process, when I'm planning to get out, etc.