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188 sats \ 14 replies \ @grayruby 11h \ on: Bitcoin celebs now sell shitcoin treasury companies. bitcoin
I am bullish on bitcoin treasury companies (i.e making a profit and sweeping excess cash into Bitcoin). I am bearish on all this fiat financial engineering nonsense that is going on. It would be nice if one of these companies actually built something in the bitcoin space. How about even just a bitcoin only custody solution for other institutions so they can dump coinbase. Is that too much to ask?
Would you call that a Bitcoin Treasury company? To me that's just a company that happens to have a bitcoin treasury, not a "Bitcoin Treasury Company"
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IPO when
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Yes. MSTR tried to build something around Bitcoin (remember MicroStrategy Orange, kind of like storing email credentials on UTXOs?), but quickly abandoned the idea before pivoting to full-blown financial engineering to buy more bitcoin.
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A point to consider: MSTR has basically proved that so far it has been cheaper to use financial engineering to "mine" bitcoin then to actually do it with actual hardware.
From that perspective, they are generating bitcoin more profitably than miners, thus have been rewarded with a 1.7x mNAV based upon that efficiency.
Now here is the big question: Will using "financial engineering mining" be more or less effective in a low-interest rate environment? (To my view it will be more effective with lower interest rates).
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I did some research into the Strive merger (Viveks company that is turning into a BTC). Although I'm not going to invest (mNAV offering is too high at 2.2x) I do think they have some clever strategies.
Essentially they are looking to merge with companies with "stranded capital". As example, take some biotech company that has $70M in cash on its balance sheet but their drug either failed approval or failed in actual testing....that company in many cases will be trading at 0.9 NAV (ie. less then the cash they have). Although counter-intuitive, thats because there are not lots of good options for them....if they simply close up shop and dividend out the money then it all shareholders get hit with ~15-30% tax hit....
What Strive is offering is: We will give you mNAV 1:1 shares in our BTC company in return for your cash. Then obviously putting that cash into more BTC.
My point on this, is I think the innovation and financial engineering still has a long runway.
Same here. I'm bullish that they are sinking their capital into bitcoin instead of other assets. That's what we are all doing right?
I frankly don't care that much that people choose to buy stock in a company that hold bitcoin over one that doesn't. If they choose to do that there are likely many many reasons. If they choose to not buy bitcoin that's their problem. I see it as a move in a better direction and one that will lead to more companies holding their cash in bitcoin instead of bonds.
I keep harping on this... we aren't gonna just wake up next week and have a world filled with anarcho-capitalists and crypto-anarchists that hate the FED and self custody bitcoin. People refuse to manage their passwords securely. We have an extremely long way to go and there will be many cycles before the masses even understand bitcoin on a basic level. The elites are just now starting to get to the 2017 era views. Bitcoin is like gold I mean. They are still babies. They will likely die before they figure it out fully.
I'm not saying we should be telling our friends to buy MSTR. I'm saying its not all lost. Its gonna get dumb before it gets smart.
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