MSTR

Aggressive_Estate688

This sounds more like a custody problem than an investment one. Moving to MSTR just to avoid self-custody risk means giving up control completely. A better move is fixing the setup. Trezor stress usually comes from the seed phrase. Tangem removes that, no seed to manage, just backup cards, much easier to live with long-term. I’d keep the BTC and simplify custody instead of switching assets.

TraderJulz

You do know that Saylor is a convicted fraudster right? And he's running the same scheme with MSTR

fucken_jim

You have NO control over that BTC, therefore the BTC MSTR have is not yours. If you only own MSTR shares, you have control of 0 BTC. Simple.

volocom7

Late to reply but reading back our chat, I do agree with you. Bitcoin is what should be bought over MSTR. That being said, I do personally think its reasonable to give MSTR a portion of my portfolio. The reason is because they are building the bridges between hundreds of trillions of dollars in fiat world buckets (bond market, equity market, dividend stock market) to Bitcoin. I think its a magnificent mechanism they've built and I think having some fiat money in their equity will do well for the forseable future. Super long term I think very little investment vehicles will exist outside of Bitcoin. Its hard to fully wrap my head around that phase of a paradigm shift like this.

Lavayo

MSTR alone excludes a few thousand people per week from ever becoming wholecoiners.

geneius

Exactly. MSTR can sell or borrow against that BTC without asking shareholders, thus shareholders don’t own the coins.

Djidji1997

In fact, it’s a smarter move to buy MSTR now. Ride up the bull, sell and put it in STRC. Next bear accumulate in real BTC

Major-Baseball-5391

the key point in your argument is "sole trustee". Shareholders of $MSTR are in no way the "sole trustee", Saylor probably is but the shareholders aren't.

pretendingtobebroke

MSTR is not an ETF, it's a company which happens to own a lot of BTC. Owning MSTR shares does not entitle you to BTC.

BakingBreadBB2

The MSTR "rally" in question : Price: 139.89 USD 1Y performance: -55.08% - 1Y price performance: -171.56

Illustrious-Boss9356

But for the purposes of calculating how many people can own rental properties, if there are 10 on a street and they're all owned by LLCs, it would be disingenous to say "no one owns those homes". You're removing the $700k MSTR BTC from the supply because they're owned by a corporation but in reality that corporation is owned by people. So therefore I would argue those need to be included in the supply when calculating people who own >1 BTC.

Althea520

When everyone ,everywhere from the news, the internet proclaiming again BTC is dead going to zero. We never went below $63k didn't touch $59k. I have been thru a few bear markets in the last 8 years and HODLED everyone and stacked. I do not see some 30k drop in October. There is way to many financial institutions involved now. Not to mention MSTR buying like a crackhead looking for a fix.

Illustrious-Boss9356

But MSTR is owned by tens of thousands of shareholders, prefholders, debtholders, etc.

el_rico_pavo_real

STRC is simultaneously pumping my Corn, MSTR, and ASST bags lol niceeeeee

snek-jazz

> from 2027 upwards ( how many BTC do you expect MSTR to have then, and what price of BTC (before your assumption that MSTR sell any)?

L00PYLL0YD

STRC/MSTR and Iran preserving value in BTC with the tolls additionally.

AdAcrobatic4002

MSTR eating up all the supply + some seller exhaustion kicking in

hames100

it’s pretty necessary for a serious bear. we need institutions like governments and MSTR to give up on it and dump their bags.

ProgramLow8782

MSTR's preferred STRC just bought a billion dollars worth of BTC through it's ATM issuance. They've been gobbling up all supply over the past month and a half and it's starting to consistently trade over 100 (on par) so the excess is used to buy BTC. check out [strc.live](http://strc.live)

BakedGoods

yeah i mean look, if you're imagining a scenario where the demand dries up so completely on their common and preferreds that for 2 years they have to use cash then sure, they're in a bind and likely they won't actually dilute they'll just return the BTC to the capital stack and fold. diluting the shareholders consistently over time isn't viable. so if that's the edge case you're betting on you're welcome to do that, the rest of us will buy MSTR and ride this thing up. point is we're not there, and for the last few years selling shares has been accretive.

BakedGoods

as long as they continue to offer a product the market wants (preferred shares, leveraged bitcoin exposure) they have a resource (trading volume) they can monetize by selling more shares into the market. notwithstanding the almost 2 years of cash they hold to pay dividends without share issuance, if you're saying what if people stop buying MSTR/preferreds, then yes that's a problem, but i'd be curious of how that could come about if BTC's trajectory continues. a bet on MSTR is just a leveraged bet on BTC. if BTC fails MSTR will, if BTC continues MSTR will as well.

BakedGoods

yeah of course it's a bet they can consistently increase BTC per share (ie buy BTC with no dilution). every stock is a bet. 2024 their yield was 74%, last year it was 22%, this year after Q1 it's already 5%--this means in the last three years there has been no dilution in so far as the BTC per share decreased. the reason people want a financially engineered stock over spot bitcoin is the bet it will outperform btc in the long-run. since aug 2020 BTC is up 500%, MSTR is up 900%--seems to be working.

No_Cod972

Some would say STRC is MSTR's iphone moment...

Spl00ky

Um I don't think you understand. I could short MSTR and then watch it go up 20% in a day, in which case I would cover my short. Then it could drop 50% over the following months.

TooFewTulips

Not for you. (assuming you’re short MSTR)

HSuke

Oh yay. More future dumping of MSTR to pay for STRC dividends

Paladin340

I'm irresponsibly long $MSTR 😉

Flat_Flounder_581

This may work for US individuals but does not work for US corporations. Capital losses can only be used to offset capital gains on the corporate side. So BTC treasury companies like MSTR are tax inefficient. Net gains are taxed but net losses are not deductible.

L00PYLL0YD

It is defo a valid opinion. That said, I own MSTR shares within a tax free wrapper. I like both.

BitcoinBaller420

No, but you can own STRC for a few days when it depegs, capture most of the dividend, and then move your money back into MSTR when it approaches 100 again and come pretty close to it. There are tax implications for the gains but if you do it in a tax sheltered account it works great.

docherino

99% of tradfi don't understand MSTR and even majority of Bitcoiner's don't get it. When i see people on twitter say Saylor will get margin called i just laugh

BitcoinBaller420

The fear of leverage is palpable, but it is creating a huge opportunity in MSTR. 

BitcoinBaller420

MSTR is the clear winner here. No margin calls, massively underpriced both in dollars and relative to Bitcoin, and your buying power is still stacked in spot Bitcoin in the Strategy vault so you are still directly contributing to Bitcoin becoming a store of value. 

Free_Entrance_6626

Do you hold any MSTR?

BitcoinBaller420

A critical point to understand is that buying power stored in MSTR, or any preferred like STRC, is not standing outside Bitcoin. The buying power you put in to these products is stored as freshly acquired spot Bitcoin on the Strategy balance sheet. It’s very different from owning, say, options or futures that might only fractionally translate into actual bitcoin demand.

BitcoinBaller420

Strategy (MSTR) has created a perpetual preferred product (STRC) which yields 11.5% dividends paid monthly with return-of-capital tax treatment. While the product is relatively new, the demand has been huge.  The return and sharpe on STRC will compete for the attention of both the $300T+ credit market AND the hundreds of trillions in equity markets, where people dream of a volatile 10% or a low-vol 5% yield.  These new buyers are shifting allocations into STRC, where they are often buying directly from Strategy. Strategy selling new STRC at $100 is what compresses the product volatility.  When these sales occur, all the new money goes straight into Bitcoin spot buys in the Strategy treasury. 

AutoModerator

Post is by: ScholarPrize1335 and the url/text [ ](https://goo.gl/GP6ppk)is: /r/Buttcoin/comments/1sercte/this_sub_is_not_smart_enough_to_understand_the/ Point 1.) Every investment but MSTR loses purchasing power to inflation. Fiat in MSTR grows in value the more that fiat is less valuable. Point 2.) Fiat will go to zero and BTC will go to infinity. When dollars are essentially worthless MSTR will be worth an insane amount of worthless dollars. Point 3.) Scarcity and value are the same thing. The Vaquita is the rarest animal on earth and farts through its blow hole. If those farts could be harvested and stored as an investment they would be the rarest/ most valuable thing on the planet. Point 4.) Saylor knows if your are HODL or have been disloyal. Currently the person with the most money to invest in buttcoin has that money from buying buttcoin puts. But if that person tries to put their dirty fiat in MSTR Saylor will find them and devalue their shares. Point 5.) Return rates from the last 15 years apply to debt issued today. Buttcoin went up so much that gains from the last decade will easily pay for interest on any and all debt even if buttcion never goes up again. 6.) The name "strategy" is pure genius 3d chess game theory. If you have a fruit stand that doesn't sell Mango it should be named Mango fruit stand. Strategy has no real strategy which means no one can effectively position themselves on the other side of a non existent strategy. Stack, HODL, and & F\*&k fiat!!! Multiple people correctly pointed out that Saylor is like Santa Claus. To that say **"You better not sell, you only can buy** **Don't look at the NAV, I'm telling you why** **Saylor Claus is coming to town** **He's selling junk bonds, so he can buy** **More buttcoin, no matter the price** **MSTR stock is going right down** **Don't look at benchmark index's, they just lead you astray** **He knows if you've been bad or HODL, so HODL for Saylor's sake!** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CryptoMarkets) if you have any questions or concerns.*

Scameroochymondo2

My Grandama, 85 years old , just bought $500k MSTR , reckons she’ll double her money in less than 1 year - I doubled down , legend

EndSmugnorance

I hope I live to see the day when Tether collapses and takes BTC and MSTR with it.

docherino

MSTR stock. You are betting on mNav expansion which typically happens in a bull market

umirinbrah29

30% MSTR, 10% BMNR, 10% COIN, 10% CRCL, 10% XXI, 4% RIOT, 4% BLSH, 4% MARA, 4% CLSK, 4% ASST, 2% ABTC, 2% BRR, 2% NAKA, 2% GLXY, 2% FWDI If it wasn't obvious, they are all crypto related stock tickers FYI

dj_destroyer

If you assume BTC goes back to a new ATH -- for example $150k -- what would you expect the share price of MSTR to go up to? Would the stock also top it's previous ATH (\~$455) due to the tight correlation with BTC price? Or would it perhaps not reach the previous ATH due to issuance of new stock/dilution?

Strange_Specific655

It’s gonna be different now because sure the market cap is high but the float is going to be a few million coins smaller with MSTR and other institutions holding forever

IncurableCrush

Lost $400k putting 1mm into MSTR at close to BTC ATH then trying MSTR Options then selling for a loss and moving it all to MSTY then sold that dog and put it into MSTW

Defiant_Ice_4860

No. MSTR is a different beast. That is an exponential again, not a power law. Very different. Imposes execution risk regulatory risk and other risks.

Tubby94

So I can accelerate this even more, with more efficiency by buying MSTR.

Zigxy

Uhh so the premise of this article is that there was a “bullish divergence” on March 31st. But by April 2nd MSTR had lost its entire “bounce” and was down 7% from March 31st.

MobilePenguins

I’ll get downvoted by some true crypto diehards but this is why I just use the stock market. MSTR and IBIT for example. Theres nothing to manage, no wallets to get hacked. You sacrifice self custody for well… no self custody! It’s managed by Wall Street for you. Can still buy and sell, can’t get rug pulled by the Nigerian Prince or a sketchy link. No seed phrase to lose.

randallmauel

Im actually getting ready to start accumulating again. BTC, ETH, SOL, AVAX, LINK. Prices look pretty good compared to 6 months ago and I was buying at that time. Now might be a good time to open small positions in HOOD, COIN, and MSTR and begin some accumulating. There should be plenty of time to build decent positions since my budget is limited and I DCA. Im down quite a bit but actually quite confident the coins and stocks I listed will come back strong.

Selmemasts

Sure but Metaplanet raised their holding by 14%. 45k for MSTR is only 6% so there I that

KateR_H0l1day

Buying MSTR is over a $120, but MTPLF is under $2. There’s a big difference for a reason, when MYPLF finally get their Mars and Mercury Preferred’s approved for sale, they’ll quickly move to second place. But they’re never catching Strategy, and the price difference between the two will remain high. However, the percentage price increase could be a different animal altogether 🤷‍♀️

Repulsive_Spite_267

Hey man. I hear ya.  Not everyone is cut out for the responsibility of self ownership. Its one of the main things that puts most people off owning it....and why ETFs are a thing. I wouldn't keep it on kraken. Any exchange is risky.  I wouldn't buy MSTR because that's high risk. An established brokerage would probably be your best bet. Unfortunately im not up to speed on those so you'll need to dyor

baIIern

>One just has to notice that it can be a hedge and get the others together. Pyramid scheme :D Yeah, MSTR started it and some already followed

Subject-Chest-8343

Some big players are staying, like MSTR, but others appear to be capitulating. Like MARA who's selling their bitcoin to go into AI computing. Isn't there usually a capitulation phase before bitcoin starts climbing again ? We might be in it. Personally, I'm steadily stacking bitcoin and MSTR, ASST and 3350 (Metaplanet) stock.

OkFarmer3779

The thing worth watching here is the ATM share issuance pace. Strategy's BTC accumulation is almost entirely funded by selling MSTR equity, when the premium to NAV compresses (which it does in drawdowns), the flywheel slows or stops. At 762K BTC they're already \~3.6% of total supply. The path to 1M BTC in 2026 requires either the premium holding up or new debt issuance. Not impossible, but the marginal buyer premium keeps shrinking as the strategy gets more crowded with imitators like Twenty One Capital.

General-Market5580

Why is MSTR, srry little bit of a new gen here

Ill_Location4524

MSTR

Subject-Chest-8343

I think MSTR is significant. 800k changed hands in the last 30 days, but how much of that is daytrading ? How much of that is for transactions ? Buyer changes fiat for bitcoin, then seller receives bitcoin and changes it back to fiat. If, say, the volume of coins really related to people increasing or decreasing their position for the long term is more like 300k, then MSTR buying like 35k in a month is significant I think.

AttemptKitchen

People saying, where are the institutions and countries/states buying BTC? I only see Strategy and nothing else. They dont get that most institutions, countries and states are buying through MSTR and STRC.

harvested

800K coins changed hands in the last 30 days. MSTR not too significant overall We're locking in about $600m a day of realized losses (people that bought higher, capitulating lower), this is what is needed for bear markets to form a floor. Important to understand what you own.

FuckM0reFromR

Lol we'll see how you feel in 6 months XD And once MSTR cracks, the flood of BTC will be legendary.

L00PYLL0YD

A lot of people saying it will drop lower. UK here so talking GBP. In 2024 it went down to 38K roughly. When it dropped to 5 on fear and greed recently, it dropped to 45-46K. MSTR alone have bought a lot among other companies and countries and people buying for 2 years is shrinking the supply among the usual other lines, such as losses and people burning sending to the genesis block. I don't think it will go much lower, but welcome it, because regardless, DCA accumulation is smart...

YouAreAHugeUser

*please god, let MSTR go delinquent. Please god. Please

jacestrachan

Disagree, we’re in one if the strongest phases of Bitcoin, I don’t see how we aren’t 1mill plus from here in the next decade and MSTR will do MULTIPLES of that

Darkerjev

You aren’t there yet young padowan. There is no “other stuff” I invest all my money into bitcoin or bitcoin derivatives like MSTR, IBIT, STRC, etc. There is only investing in bitcoin. There is no second best.

rs1971

Between actual BTC and MSTR it's about 15% of my net worth at today's prices. It's enough that I'll be set if BTC every really does go to $500k and not so much that I'll be destitute if it goes to zero. I don't intend to ever buy any more of either, regardless of what happens with prices.

Gambler_Addict_Pro

Yield-starving savers? 12% is more than the average SP500! The yields is simply too generous (too good to be true).  I hope it works out since I’m betting on STRC. I’m hoping STRC brings so much Bitcoin to MSTR, that it will push the price back up.

DRX-trade

Hey man, good callouts on the bearish sentiment. MARA deleveraging is a valid point, but single corporate actions often aren't the sole driver for sustained trends. ETF inflows cooling is notable, yet MSTR consistently accumulating shows conviction from other big players, so it's not a total institutional desertion. From a prop trading perspective, we're less focused on headlines and more on the charts and managing risk. Losing the 50-day MA and testing supports is absolutely key. But projecting an absolute $45k based purely on a percentage drop isn't how we define risk. Instead, define your *own* clear invalidation levels for your trades. What specific price action would make your long thesis invalid? Size your positions based on that. The 'altcoin bloodbath' is standard when BTC corrects, so factor that in. Focus on your invalidation and sizing.

HSuke

I was testing you. I had already marked you as a lazy incompetent MSTR and BTC maxi multiple times throughout the year. This was your final test to see if you could actually read critically or if you only read titles. I give up. You're beyond hope.

Subject-Chest-8343

That's what I'm doing. The play here is that MSTR is likely to outperform bitcoin over say 10 years, then you have the option to sell, withdraw tax-free from Roth IRA then buy more bitcoin.

MapIntelligent93

MSTR

canuckaudio

yes MSTR keeps buying it to keep it afloat

HSuke

In this case, they're talking about convertible notes, the same kind that MSTR uses. MARA is also a large Bitcoin reserve.

forsenbois21

Stick to the theory sycle with this you get the idea to look at time not price. and things changed this last sycle Altcoins are no longer secure like every sycle used to be, my guess is that money was stolen or driven into BTC etfs or it's derivates like MSTR and the new to come.

xxTheAIguy

I always wondered that. Why doesnt MSTR pay off the debt?

HSuke

Well, relative to the shit that MSTR is doing their shareholders. MARA surprisingly took a profit on its convertible debt repayments, and did so without diluting shares or selling stock. Complete opposite of MSTR.

HSuke

The reason they have debt is because they're also one of the biggest BTC reserve companies and followed the same model as MSTR to sell convertible debt. Unlike MSTR, they're paying off their debt early, not diluting shares, surprisingly taking a profit on the repayment, and pivoting to AI data centers.

Hfksnfgitndskfjridnf

Gotta love the MSTR bulls. “You guys just don’t understand the genius strategy of Saylor. Issuing perpetual stock with dividend obligations of 11.5% forever is brilliant!” Meanwhile their first tranche of STRC issued has already given back 10.1% of the BTC per share it acquired in less than a year. If MSTR stays at this price for another year, even if they start increasing 30% y/y every year going forward, this initial STRC issuance will be a net negative decision.

Daedalus_Knew

MSTR is a BTC company, they don't have a responsible option that involves selling Bitcoin. That would destroy them.

HSuke

> The company has made it clear they are pivoting toward artificial intelligence and high-performance computing. The big difference between MARA and MSTR is that MARA is acting more like a responsible company that values its shareholders and profits. Meanwhile, MSTR is still diluting and canabalizing its MSTR shares for its premium shares and BTC holdings.

Crypto_tipper

Nah. By just buying on a schedule I’m totally at ease. I actually get a little worried every time MSTR announces a big buy because it means I’m running out of time to accumulate.

Tubby94

I went full send like this but I'm strictly buying MSTR

wkndatbernardus

No, it's only a wash sale if you sell a spot ETF, like IBIT, and then buy the same ETF right away (before 31 days has elapsed). The grey area is whether we can sell a spot ETF, like IBIT, and then buy another spot ETF, like FBTC, without waiting 31 days. Some financial pros say that strategy is not a wash sale because they are different securities, operated by different companies, and some say it is because they both track the exact same asset. Personally, I solved this problem by selling some IBIT at a loss and then purchasing MSTR with the proceeds.

Valyarian

I can see where your coming from, but this would only make sense if MSTR was over leveraged to the point that it was unhealthy for Bitcoin, but it’s actually the opposite, you should any of his recent earnings calls, he point out how he’s created this monstrous acquisition using only 10% leverage, all the rest is of his own financial engineering. I feel bad for people who don’t DYOR because this goes so deep that it’s easily the best that can make you life changing wealth, MSTR dies if Bitcoin goes under 8k for 3 years, if that ever happens, I’d go all in on Bitcoin.

JerkyJunkie

For the most part, you answered your own questions pretty well. Well, I would recommend in. This is not financial advice. Would be to take all the liquid to your currently sitting on. Use it to purchase STRC, put a DRIP on it, and forget about it for six months or so. At the same time take as much as you physically can each pay period, and dollar cost average into self custody bitcoin. At the end of the six months, you should have a pretty large amount based on the original investment in STRC. If you choose to do so you can then cut off the drip, and use the 13% un taxed dividend, monthly to help assist with bills, etc. The STRC will continue to produce 13% monthly. Then you can use much more of your pay period funds to continue to dollar cost averaging at a higher rate into bitcoin. Unless you sell it, the STRC will be there forever producing 13% monthly. Which gives you a good passive base, and allows you time to build up your bitcoin stack, as well as looking into other opportunities like bitcoin proxy trades (MSTR), when it turns around call options will be incredibly lucrative! G-D Bless, and stack sats!

AnyPortInAHurricane

the CRCL scam just imploded, joining the MSTR and BMNR scams as epic tax losses winning!

Lavayo

STRC is just on another level. MSTR bought 7649 BTC a week YTD. That's well above any year before, and 49x more than last bear market (156 a week). If they can keep this up they will hit 1M in August/September or early Q4. Impossible to time that moment, but what's your best guess anyways?

TheKaotiicImpulse

Why not MSTR? Basically amplified Bitcoin stock

Adventurous-Soil528

I’m 100 percent MSTR in Roth and 90 percent SCHB and 10 percent SCHD in the 401k. When I am closer to retirement, I will rotate some of my MSTR into STRC. Next year I am considering opening a bitcoin only Roth IRA with Unchained and making my contributions 100 percent spot bitcoin for the year. I also buy spot btc outside retirement accounts of course. I see nothing wrong with your 100 percent btc exposure in your retirement accounts. I believe bitcoin will do some very interesting things these next 3 halvings and we will be very happy with our decision.

Nice_Category

My Roth is about 65% FBTC. 20% of the remainder is some form of MSTR. The final bit is a typical retirement mix. 

stoplossftw

if MSTR goes bust, that's a positive for BTC in the long run

Darkerjev

Dont believe in the doubters. Do the research and follow your gut. My roth IRA is full MSTR. At peak mstr price, my roth ira was about 100k. Im hurting now though, but im in it for the long term.

F4NT4SYF00TB4LLF4N

BTC is about -45% from its peak. When it comes down, it goes back up. When BTC goes up, MSTR goes up more.

F4NT4SYF00TB4LLF4N

I was 100% FBTC in my Roth. Then I sold it and went 100% MSTR.

la-bella-confusione

with the sole exception of NVDA, MSTR has been the best investment over the past 15 years, so that would be another way to play this strategy (see what I did there?)

Hfksnfgitndskfjridnf

They bought 1,000 BTC and increased BTC per share by 0.0011%. This did absolutely nothing for common stock shareholders, it just made MSTR bigger and made future yield harder to get.

Hfksnfgitndskfjridnf

Collapse or restructuring of MSTR is inevitable. The only question at this point is how long does it continue and how much more capital do they absorb beforehand. Saylor has set himself up for failure. He has pitched his company as producing value through “BTC yield”. Except the math is pretty simple, the more Bitcoin he buys, the harder it is to get additional yield. The more preferred stock he issues, the harder it is to maintain a positive yield. Finally the more overall Bitcoin he owns the more likely the shares are to trade at a discount rather than a premium. All three factors work against MSTR and all can only get worse as time goes on. The first one is pretty obvious, the more Bitcoin they own, the harder it is to get yield because you’re operating off a bigger base. MSTR first started reporting “BTC yield” when they had 226,500 BTC toward the end of 2024. In Q4 2024 they bought 194,180 BTC and generated a “BTC yield” of 48%. In all of 2025 they bought 226,102 BTC, yet only generated a BTC yield of 22.8%. So they bought more BTC but only got half the yield. So far in 2026 they’ve bought 89,599 BTC but their yield has shrunk to 3.4%. If they keep up this pace they’ll buy about 50% more BTC than they did last year but only get about half the BTC yield. And 2027 will be even worse. The second factor is also pretty obvious, the more dividend obligations they take on, the harder it will be to maintain positive yield. At the end of 2024 they have essentially zero interest or dividend obligations, it was only 39 million in total per year. Since launching the preferreds, however, that number has ballooned, they now owe 1.08 Billion in interest and dividend payments per year. Considering MSTR has raised 7 Billion in capital this quarter, dividend obligations represent 3.7% of the capital raised. The more preferreds they issue, the higher that percentage will become. They’ve basically started on a treadmill of doom. The more preferreds they issue, the more capital they must raise every quarter just to maintain the status quo. The market does not have an infinite capacity to supply more and more capital to one enterprise. Finally, the more Bitcoin MSTR owns, the more likely the shares will trade at a discount to the Bitcoin holdings compared to a premium. If investors of MSTR want to reduce their exposure to Bitcoin, all they can do is sell their MSTR shares. MSTR doesn’t then go and sell the Bitcoin, it keeps it. This means that over time, the larger the Bitcoin holdings get, the more likely you are to have shareholders that no longer want exposure to Bitcoin, and the shares will start to trade at a discount because that sell pressure only flows towards the shares and not Bitcoin itself. Trading at a discount will create major problems for MSTR because it impacts their BTC yield significantly. Buying BTC through common stock sales will no longer be accretive but instead will be dilutive. Also selling common stock to pay preferred dividends will reduce yield even more than it would have. Once shares trade at a discount MSTR can only get BTC yield through issuing more preferred stock or by selling Bitcoin to buyback shares. The issue with selling Bitcoin to buyback shares is that it shrinks the company and makes them more prone to bankruptcy. The only reason they can issue preferred stock in the first place is because they are taking the proceeds and investing in Bitcoin with it, hoping the gains in Bitcoin will outpace the dividends. If they start to sell the Bitcoin to buyback shares, well then what’s the asset that’s paying for the preferred dividends? It’s not there anymore. So selling Bitcoin to buyback stock when it’s trading at a discount isn’t really an option. Which means the only way to produce yield is to issue more preferreds. But that ultimately ends up with the same problem. The market will eventually stop buying enough new issued preferreds that covering the dividend will be impossible. So they either have to sell shares trading at a discount or sell the Bitcoin itself. Either way, that’s the end of the BTC yield story, and which point why would anyone buy the shares unless they are getting a steep discount? The company won’t be generating any value and there will be huge costs to carry. Anyone could just buy BTC themselves and avoid those costs…. So that’s exactly what they’ll do. And as more people do that, MSTR will trade at a bigger discount and the preferred dividends will eat further and further into the solvency of MSTR until it collapses or restructures. There really isn’t any other alternative. The only question is how long it takes and how big MSTR gets before it happens.

waitmarks

Like what? What would you be doing as head of MSTR if you had access to all those bitcoin and also a bunch of debt obligations?

DrEtatstician

When MSTR stops instance accumulation otherwise it’s just MSTR coin , it’s loosing appeal

Hfksnfgitndskfjridnf

This guy buys even when it’s not beneficial to common stock holders. MSTR increased their total Bitcoin holdings by .14% with this buy. It increased their Bitcoin per share, their stated metric they are trying to optimize, by .0011%. Yes that’s 2 leading 0s. At that conversion rate they would have to double their total Bitcoin, get to 1.5 million total just to increase their BTC per share by 1%. So my question is, why is he still buying when it’s not benefiting shareholders? It’s because he’s stuck, and he has to constantly buy or risk both BTC and his share price tank. Saylor isn’t optimizing for long term shareholder value creation, he’s desperately trying to prop this up. Every buy he makes with common shares hurts the long term potential value of the company should Bitcoin actually succeed. The 1,000 BTC he bought this week didn’t do anything to help Bitcoin per share, in fact, buying 1,000 BTC just made it more difficult to get BTC yield in the future because they now have a bigger base of BTC. In the long term he is better off not buying anything until he can get better terms. But that’s not what he’s doing.