How a Leveraged Bitcoin Bet and a Fading Business Have Created a Bubble Destined to Pop - An In-Depth Analysis of MSTR's Strategy, Schemes, Fundamentals, and Outcomes.
you failed to mention they have more real capital than anyone in the world. they will be the most valuable company in the world in a decade. most of their debt is not callable and they could tolerate a prolonged btc decline to 15,000 without issue.
i will continue to build generational wealth alongside him.
There are so many flaws in your argument, I don’t even know where to start. The only thing I will say is that you are conveniently omitting the fact that he is stacking the future base collateral asset of the world against which all other assets are melting away. That in itself is the mic drop moment in the context of the current implosion of bond markets all over the world both from a yield and illiquidity perspective. The incoming rally in this stock over the next 6 months will be met with astonishment. I guess having diametrically different opinions is what makes a market.
You say, "He describes fiat currency inflation as a process of "bleeding the free market to death" and presents Bitcoin as the only rational and ethical solution. This messianic framing serves a critical purpose: it elevates the company's strategy from a high-risk corporate treasury decision to a moral and intellectual imperative. It provides the powerful "why" that allows investors to overlook the dangerous and unsustainable "how."" ...
Why do you think he is wrong in this fundamental analysis of the fiat system? If he is right in his thesis and he can continue to issue fiat securities and buy BTC he will win, providing he can avoid default along the BTC / USD exchange rate path.
Of course, no risk investment comes with guarantees. My question was about his fundamental thesis about the nature of fiat currency debasement risk. If you believe this point, then his model will work assuming MSTR can avoid a liquidation event in a significant BTC sell-off.
The currency can be debased ad infinitum but unless you can get new investors the company will run out of cash regardless of how worthless the currency becomes.
Odd how nobody wants to answer your question… I think his fundamental thesis is sound. And as others have pointed out, his debt cannot be called so MSTR would be able to avoid a liquidation event even if there were a significant sell-off.
A digital dollar is the most likely short-mid term scenario as it allows the US to sell its debt globally more easily propping up our current system. But other fiat currencies will begin to falter and eventually so will the USD.
Who knows how long this whole process will play out though, so I’m taking a far more cautious approach than Saylor (I certainly can’t afford liquidation 😂)… but in the long term his thesis is correct and BTC will outlast them all.
The MSTR business model is a complicated variant of the REIT model (emit stock at premium to NAV, pair with a bit of debt to be leverage-neutral, buy productive assets, NAV per share increases). The difference is thatv unlike real estate which produces rents Bitcoins do not produce anything but appreciation (so far).
If I wanted exposure to Bitcoin I would just buy the thing directly (or using spot ETFs). Why pay a (large) premium to enrich self-serving middlemen?
The way I read this is...if the cost basis is low (especially before halving), then this has legs to run upto late 2026 safely OR if BTC price drops by a 30-40% whichever is earlier.
In either scenario, the low cost basis will provide an exit at significant premium.
Its ultimately about the investor being on the ball and looking at optimizing their bag, the current micro market demands more than ever that we be ready to pivot fast when required.
PS : the cushion in this market scenario is the perpetually weakening dollar & the increased institutional & slow but sure country level participation in btc. That's the hedge forming to prevent any precipitous fall in BTC price.
Hoping the best for us all...let's get smart before we get broke 🙏
Excellent piece. I’ve long been talking about this but far less eloquently than you.
Pure hypothetical question - couldn’t they find some sort of business model around their « war chest »? Couldn’t they land their bitcoins for instance and collect more premium they would pay interest?
If they lend their bitcoins that’s just introducing another layer of risk and contradicts their narrative of buying and holding bitcoin as the wealth creator.
Somebody should write a letter to the board of Capital Group asking them to justify a multi-billion $ position in MSTR in their mutual funds that have a fundamental value mandate. This is a significant breach of fiduciary duty and that selling could accelerate the implosion of the premium to NAV
you failed to mention they have more real capital than anyone in the world. they will be the most valuable company in the world in a decade. most of their debt is not callable and they could tolerate a prolonged btc decline to 15,000 without issue.
i will continue to build generational wealth alongside him.
Kudos! You nailed it.
I hope people read and share what you have written and wake up before they are financially harmed.
And let’s hope the company never joins the S & P 500 as some have speculated as well.
Excellent piece 👍
Thank you!
There are so many flaws in your argument, I don’t even know where to start. The only thing I will say is that you are conveniently omitting the fact that he is stacking the future base collateral asset of the world against which all other assets are melting away. That in itself is the mic drop moment in the context of the current implosion of bond markets all over the world both from a yield and illiquidity perspective. The incoming rally in this stock over the next 6 months will be met with astonishment. I guess having diametrically different opinions is what makes a market.
Thanks for sharing your work and insight.
You say, "He describes fiat currency inflation as a process of "bleeding the free market to death" and presents Bitcoin as the only rational and ethical solution. This messianic framing serves a critical purpose: it elevates the company's strategy from a high-risk corporate treasury decision to a moral and intellectual imperative. It provides the powerful "why" that allows investors to overlook the dangerous and unsustainable "how."" ...
Why do you think he is wrong in this fundamental analysis of the fiat system? If he is right in his thesis and he can continue to issue fiat securities and buy BTC he will win, providing he can avoid default along the BTC / USD exchange rate path.
He needs investors to pay a massive premium to buy “bitcoin”, but there’s no guarantee they will continue to do so.
Of course, no risk investment comes with guarantees. My question was about his fundamental thesis about the nature of fiat currency debasement risk. If you believe this point, then his model will work assuming MSTR can avoid a liquidation event in a significant BTC sell-off.
The currency can be debased ad infinitum but unless you can get new investors the company will run out of cash regardless of how worthless the currency becomes.
Debasement means his liabilities would collapse while his assets would soar in value. No further investors required.
Where does the cash flow come from to operate the organization?
Odd how nobody wants to answer your question… I think his fundamental thesis is sound. And as others have pointed out, his debt cannot be called so MSTR would be able to avoid a liquidation event even if there were a significant sell-off.
A digital dollar is the most likely short-mid term scenario as it allows the US to sell its debt globally more easily propping up our current system. But other fiat currencies will begin to falter and eventually so will the USD.
Who knows how long this whole process will play out though, so I’m taking a far more cautious approach than Saylor (I certainly can’t afford liquidation 😂)… but in the long term his thesis is correct and BTC will outlast them all.
Excellent pièce indeed.
The MSTR business model is a complicated variant of the REIT model (emit stock at premium to NAV, pair with a bit of debt to be leverage-neutral, buy productive assets, NAV per share increases). The difference is thatv unlike real estate which produces rents Bitcoins do not produce anything but appreciation (so far).
If I wanted exposure to Bitcoin I would just buy the thing directly (or using spot ETFs). Why pay a (large) premium to enrich self-serving middlemen?
Interesting read! Thankfully just actively trade the chart
Insane post!
The way I read this is...if the cost basis is low (especially before halving), then this has legs to run upto late 2026 safely OR if BTC price drops by a 30-40% whichever is earlier.
In either scenario, the low cost basis will provide an exit at significant premium.
Its ultimately about the investor being on the ball and looking at optimizing their bag, the current micro market demands more than ever that we be ready to pivot fast when required.
PS : the cushion in this market scenario is the perpetually weakening dollar & the increased institutional & slow but sure country level participation in btc. That's the hedge forming to prevent any precipitous fall in BTC price.
Hoping the best for us all...let's get smart before we get broke 🙏
Incredibly informative 👍. Thank you!
No credit to chanos?
Excellent piece. I’ve long been talking about this but far less eloquently than you.
Pure hypothetical question - couldn’t they find some sort of business model around their « war chest »? Couldn’t they land their bitcoins for instance and collect more premium they would pay interest?
Thanks for your answer.
If they lend their bitcoins that’s just introducing another layer of risk and contradicts their narrative of buying and holding bitcoin as the wealth creator.
Somebody should write a letter to the board of Capital Group asking them to justify a multi-billion $ position in MSTR in their mutual funds that have a fundamental value mandate. This is a significant breach of fiduciary duty and that selling could accelerate the implosion of the premium to NAV
pls short mstr then
A well written and cautionary tale, can only hope this gets pushed forward for more people to read