MicroStrategy Inc.’s core discovery is that the US stock market will pay $2 for $1 worth of Bitcoin. MicroStrategy (now called Strategy) is essentially a pot of Bitcoins, and its stock trades at roughly twice the value of its Bitcoins. So it issues more stock and buys more Bitcoins and goes up in a bizarre perpetual motion machine that I write about a lot but cannot explain.
Me too, friend. Me too.
"The stock market pretty consistently pays $2 for $1 worth of crypto.""The stock market pretty consistently pays $2 for $1 worth of crypto."
by the laws of the universe, sanity, arbitrage etc etc, this shit gotta stop eventually. (#971152, #974166)
Also, convertible bonds too... let's financially engineer the shit out of this thing.
Twenty One is trying, in part, to replicate that... but won't be as successful, says Levine, since MSTR is meme-ish already and double-/tripple levered ETFs already shoving the stock around.
MicroStrategy really is a finely tuned machine for extracting value from Bitcoins in the public markets, but it’s not that easy to copy it. Honestly it’s still pretty easy though.
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when every company holds a bitcoin reserve on the balance sheet the multiple to net asset value of strategy we finally drop to one.
they can only do this because they appear unique. Eventually they'll be a run of the mill is having an IT department in your company.
That's an interesting thought.
This world is a world of imbeciles. Having the opportunity to own the real thing they buy the stupid fake thing that merely reflects, remotely, Bitcoin.
So, where are you at on "The right price is the current price"?
It sure seems like the market is sending strong signals that the bitcoin price "should be" (in some sense) higher, which is hard to square since anyone can buy bitcoin anytime they want.
What's going on here?
I have no idea.
I'm as clueless/befuddled as Levine, I think. The best I have is trapped funds and this being a minor (globally-financially speaking) anomaly about to correct itself
The fly-wheel taking us towards equilibrium in the near future, would be the easiest outcome to process.
also... just a strange, temporary anomaly and the financial sanity world is healing?
I saw that. Someone is about to lose their butt. His logic makes a lot of sense to me, but only if that description of Strategy is correct.
as a fellow better, I do like it when someone "lose[s] their butt!"
yo, Undisc -- who would be the best person to explain the Strategy play, and why Wall Street values $1 of bitcoin at $2+ (let's say, hypothetically, for a printed magazine that may or may not be the best in our industry...).
You'd be keen yourself, perhaps?
Definitely not me. I find it deeply confusing.
Are you writing a piece for the Stacker News Zine? That’s the only printed magazine I read that isn’t for 5 year olds.
who's the best person you've seen describe it/explain it? (aside from me of course) Matt Levine? Check on Chain? Some of the YT Saylor bois?
You’re my go to analyst. There is no second best.
I know @elvismercury is/was fascinated by what Saylor’s doing, so he might have some good resources in mind.
There is also the replacement cost. If a large entity wanted to buy a large amount of corn, they'd push the price up and their average price would be higher than the current price. This alone justifies a premium, as long as there is demand.
100% is a hell of a premium, though.
Since January 2024 they've also doubled their sats/share.
Buying the f'in dip
Belive it or not calls.
I guess transaction charges and maintenance fees are put into consideration, nonetheless that benefits only the market makers and not the takers. Too bad, we gotta make that stop
Haha, this whole MicroStrategy thing is straight-up wild. They’ve basically turned Bitcoin into a stock market gimmick, and the fact that it trades at 2x the value of its holdings is like some finance wizardry at its peak. It’s this bizarre feedback loop where the stock's inflated price lets them buy more Bitcoin, which just inflates the stock more. It’s like watching a financial Ponzi scheme, but with way more tech buzzwords and less shame.
And yeah, it has to stop eventually, but who knows when? As long as the market’s playing along, they’ll just keep going. Now others trying to copy it, like Twenty One? Not gonna be as easy. You can’t just replicate the "meme stock" magic and expect it to work the same way.