• Bitcoin rallied more than 50% off its lows but is down YTD. MSTR, ASST, and COIN all follow it, with correlations above 0.70 and lower equity correlations.

• All 3 have large short interest with high crowded and squeeze scores, but not IBIT, the ETF. Equity investors may be shorting the stocks as a proxy for bitcoin.

• ASST is the outlier: much smaller and less followed, with much higher short interest and a 100 squeeze score since breaking out in the August squeeze.

• Bitcoin rallied more than 50% from its lows after massive sell-offs earlier this year, but remains down YTD.

• MSTR, ASST, and COIN have the highest return correlations to bitcoin, all above 0.70. They are also correlated about 0.4 to the S&P and Nasdaq, so they retain meaningful exposure to the broader equity market.

• Strategy (MSTR) holds 846,000 bitcoin, 4% of all bitcoin outstanding. The stock broadly follows bitcoin, but the premium/discount varies, which depends on the dilution, converts and debt. It has software worth 4% of the stock’s value and has a $65B market cap.

• Coinbase (COIN) is a cryptocurrency exchange, and its bitcoin holdings are small. COIN’s revenue is directly linked to bitcoin, as it earns commissions and other fees based on transaction values. The market cap is $53B.

• Strive (ASST) has about $2B in AUM and 26,355 bitcoin. At $30.27, the stock broadly tracks bitcoin, but its premium or discount to its holdings depends on how warrants and preferred stock are counted. ASST has a $3B market cap.

• MSTR’s and ASST’s short interest correlated both negatively and positively to their stock prices. COIN’s correlation is mostly negative but rose with the stock in August.

• Positive correlation recently means investors have been shorting on the way up.

• IBIT, the bitcoin ETF, has a very small short interest and is not crowded.

• The stocks all have large short interest and high crowded and squeeze scores, but ASST’s short interest is particularly elevated. The graphs are similar at times. Short interest in all three fell from mid-July into mid-August as the stocks rose, with COIN bottoming first and turning back up.

• Equity investors may be shorting these stocks as a way of shorting bitcoin.

• MSTR is bigger and relatively less crowded than the others and has had a squeeze score at times above 70, including now. ASST is a small stock that is crowded, and its squeeze score has hit 100 and been above 70 often. With the recent breakout, the score has been at 100.

• Only ASST has squeezed – in August – when it rose sharply on falling short interest with high squeeze scores. None of the three has squeezed since. ASST is the only one small enough to squeeze – a speculative, thinly followed $3B stock where modest covering moves the price. MSTR at $65B and COIN at $53B are too big for short covering to move them.

Want to know more? Access this data in real time using S3’s BLACK APP & BLACK MAP

The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (“S3 Partners”) to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks, and merits, as well as the legal, tax, accounting, and investment consequences, of such decisions.