“Bitcoin Slumped just Modestly from Record High Levels on Friday, But The Carnage in Related Stocks Was Far WORSE.”, – WRITE: www.coindesk.com
Treasury Companies Such as Strategy (Mstr) and Semler Scientific (SMLR) – Each Down Roughly 6% Even as Bitcoin Slipped Only a Bit More than 2%. Japan-Listed Metaplanet is Lower by 24%.
The Picture Looks Even Worse WHEN ZOOMING OUT: CHANGING HANDS AT $ 376 Early Friday Afternoon, Mstr Shares Are More More than 30% Below Their All-Time High Hit Late In 2024 Even Even.
The Price Action Comes Amid A Continuing Debate Taking Place on Social Media About the Sustainability of Michael Saylor’s (and Those CopyCatting Him) Bitcoin-Vacuuming Playbook.
“Bitcoin Treasury Companies Are All The Rage this Week. Mstr, Metaplanet, Twenty One, Nakamoto,” SAID Modestly Well-Followed Bitcoin Twitter Poster Lowstrife. “I THINK they’re toxic leverage is the worst things of kind of [and] What Bitcoin Stands For. ”
The Issue, Account to Lowstrife, Is that the Financial Engineering That Strategy and Other Btc Treasury Firms Are Employing to Accuumulate More Bitcoin to it Net asset Value (in these Cases, Their Bitcoin Treasuries).
As long as their mnav remavins above 1.0, A Given Company Can Keep Raising Capital and Buying More Bitcoin, Because Investory are Showing Interest in Paying A Premium for Exposure Toc. Holdings.
If MNAV DIPS BLOW THAT Level, However, IT Means the Value of the Company is Even Lower than the Value of It Holdings. This Can Create Significant Problems for A Firm’s Ability to Raise Capital And, Say, Pay Dividends on the Some of the Convertible Notes or Preferred Stock It May.
Shades of GBTC
Something Similar HapPeded to Grayscale’s Bitcoin Trust, GBTC, Prior to ITS CONVERSION INTO an ETF. A Closed-End Fund, GBTC Durying The Bull Market of 2020 and 2021 Traded at an Ever-Growing Premium to Its Net Asset Value as Institutional Investors Soungt Quick Exposure to Bitcoin.
WHEN PRICES TURNED SOUTH, However, that Premium Morphode Into An ABYSMAL Discount, WHICH CONTRIBUTED TO A CHAIN OF BLOWUPS BEGINNING WITH HIGHLY-LEVERS The Resultant Selling Pressure Took Bitcoin from A Record High of $ 69,000 All The Way Down to $ 15,000 in Just One Year.
“Just Like Gbtc Back in The Day, The Entire Game Now – The Whot Thing – Is Figing Out How Much More Btc These Access Vehicles Will Scoop Up, And Wilter AT Castle Island Ventures, Posted in Respons to Lowstrife’s Thread.
The Thread ALSO TRIGGERED REPLIES FROM MSTR Bulls, Among Them Adam Back, Bitcoin OG and CEO OF BLOCKSTREAM.
“If mnav
