Today, I began buying $MSTR call leaps. Three weeks ago, I doubled my MSTR share position and made a follow-up post saying I would buy call leaps below $100. Since then, not only has MSTR held above $100, but the FUD and sentiment have somehow gotten worse. Sentiment for both BTC and MSTR is dismal with everyone jumping on the AI bandwagon. Crypto Fear & Greed has been below 10 ('Extreme Fear') for a while now. BTC is currently down 5 months in a row, with weekly RSI below 30. MSTR is currently down 8 months in a row, with weekly RSI below 30 for the past few months. In addition to that, MSTR's mNAV has traded below 1 for a while now (currently at 0.90). These are all classic bottom indicators, yet many people on X are calling for lower prices. Thus, today I decided to start buying MSTR call leaps. I bought the $250 strike expiring December 15, 2028. I paid roughly $5,000 per contract, which makes my breakeven price around $300 per share. I believe BTC and MSTR will recover and make new ATHs by then. My minimum price target for MSTR is $1,000. While this is an 8x from the current share price, it would be a 14x for my calls. However, I expect MSTR to surpass $1,000, and when you account for mNAV expansion due to irrational exuberance (e.g., Nov 2024), the gap between the ROI of shares vs calls will widen even more. If you've been following MSTR's price action over the past two cycles, you'll notice that MSTR tends to peak before BTC does. In 2021, MSTR peaked 9 months before BTC did. In this recent cycle, MSTR peaked in Nov 2024, almost an entire year before BTC did. Thus, I believe Dec 2028 calls are appropriate. The next Bitcoin halving is set for 1H 2028, with mining rewards cut from 3.125 to 1.5625 BTC. This will be the last time mining rewards are above 1 BTC. I believe this will be a catalyst that will drive the price of BTC higher. This recent Bitcoin cycle was heavily dominated by institutional investment, while retail largely left to chase AI stocks. I believe by the next halving, much of the easy gains of the current AI trend will be played out and many retail investors will rush back into BTC. However, despite most of my bottom indicators flashing, there is still one that hasn't hit: the 200-week simple moving average. Historically, Bitcoin has bottomed at or below the 200-week, which is currently at $58.5K. Thus, I have left myself some cash to buy more contracts if BTC (and MSTR) do indeed move lower or at least hang around this level for a while. Regardless, I believe the risk/reward for longs is favorable here. I look forward to providing updates in the future. 🫡🚀
