MicroStrategy's (MSTR) premium compared to its Bitcoin holdings is projected to diminish, according to a report released by Steno Research on Friday.

"The current situation is supported by the fading positive impact of MicroStrategy's recent stock split," noted analyst Mads Eberhardt, emphasizing that the introduction of options for spot Bitcoin exchange-traded funds (ETFs) in the United States will further reduce investors' motivation to prefer MicroStrategy stocks over those ETFs.

Eberhardt mentioned that the company recently executed a 10-for-1 stock split in August, which seemingly contributed to a temporary hike in stock value, leading to a nearly 300% premium against its Bitcoin reserve.

The report suggests, however, that this valuation is becoming misaligned with a direct assessment of its assets and business fundamentals. As considerations surrounding Bitcoin become more favorable, investors may begin to favor direct Bitcoin holdings instead. Should Donald Trump return to office, this regulatory inclination is likely to persist.

Consequently, it's anticipated that Bitcoin's strong performance could increase demand further, but sustaining MicroStrategy's inflated premium would demand a substantial surge in buying activity.

Steno's report also highlighted that during the 2021 crypto bull run, MicroStrategy's premium consistently lingered under 200%. This current state is unsustainable considering the recent stock's remarkable surge exceeding 240% year-to-date.

For further details, check out MicroStrategy Hits New Highs.