pull down to refresh
I'm not sure whether you refer to me or the author. I have a pretty decent grasp of Strategy and its products, as I've laid out in podcast and writings and like 500 SN posts for ~econ. You're welcome to read my actual objections.
I was referring to the author of the substack...
Haven't read anything you've posted, I will, though.
Can you link something here?
long-read for Bitcoin Magazine earlier this year is probs the best place to start for what I do and don't grasp
https://bitcoinmagazine.com/bigread/bitcoin-treasury-companies-how-to-think
my talk with Nik Bhatia about Strategy (#1356919), or this #1350852
some crit echo Jeff Deist: #1291642
A very good article, thank you. You had some good insights and it was a good read.
You do make the point that Strategy is bulletproof, but in some ways it fells a bit too focused on "treasury companies" -- a bit like normies conflate "crypto" and bitcoin.
Your failure modes:
"In the absence of that — say, nobody buys the treasury company issuances, and financial capital flows somewhere else; money printing stops; interest rates on (safer?) government securities shoot up, etc — I don’t see how Strategy’s mNAV doesn’t just collapse back down to 1."
.....>I assume you mean this as a temporary scenario, and not a permanent state? In what (fiat) universe would money printing stop, and government bond rates go up?
"If fund managers or treasury departments or family offices routinely stack bitcoin instead of various Strategy products (or securities of Strategy copy-cats, as the case may be in different parts of the world), the primary reason for bitcoin treasury companies go away."
.....>Yes, this will happen eventually. Is it going to happen in 5 or 10 years?? Likely not. It might happen in 20 years, or 50. The gold standard ended in 1913. People thought fiat would die in 1971 -- I think Strategy has many decades to run a Bitcoin/Fiat carry trade.
My projection, which I didn't get into in that article, is that it happens in a few years, conditional on tradfi grasping bitcoin.
Which is what they have to do to answer the very simple question before investing in the Strategy products: where does the yield come from?
Once they get that, all these investment mandates and regulatory barriers will come crashing down very fast and Strategy turns into an ETF with 1:1 bitcoin exposure
You just might be right:
If you don't understand bitcoin, you won't buy Strategy's financial products.
If you do understand bitcoin, you will just buy bitcoin.
Maybe...but STRC is $3 billion and growing.
I don't think banks, insurance, and tradfi in general will understand bitcoin any time soon, when only .001% of the population does. Even if they did, they can't meet short term fiat liabilities with bitcoin as a treasury asset. Yes they need some bitcoin, but they would need a small percentage for growth, and a large percentage of more stable assets to meet shorter term obligations. That is, in today's fiat world, not in a bitcoin future.
Another bitcoiner with a fundamental misunderstanding of Strategy.
"With the passage of the GENIUS Act and the likely approval of the CLARITY Act, institutional investors and large funds will soon have direct, regulated access to Bitcoin. When that happens, the need to access Bitcoin through a leveraged equity proxy like $MSTR diminishes significantly."
Strategy's product is not $MSTR, its:
STRC
STRE
STRF
STRD
STRK
Insurance companies, pensions, banks, and other institutions, unless they want to be 200% overcollateralized, can't hold bitcoin as a base asset, when they could have to pay billions for a hurricane or wildfire disaster in a single year (in the case of insurance, for instance). What if bitcoin is down 70%?
Banks are starting to figure it out, are buying STRC, raking in 10%, and offering their customers 4% "high yield" savings and CDs.
Not everyone can use the volatility of bitcoin. Strategy strips the volatility, gives it to the shareholders, and sells a product that much of the world is starving for.
If you don't understand Strategy, that's perfectly fine: you SHOULD hold most of your wealth in bitcoin only. But what if you have enough bitcoin, and want to invest, instead of save?? Strategy is one of the only real investments that has a chance of growing in bitcoin terms.
I understand the Saylor hate: his rhetoric changed from bitcoin maxi, to fiat maxi, when things started getting big. In my opinion, his understanding of bitcoin did not suddenly disappear, and he is saying what he needs to, in order to get what he wants.
Strategy's "business" didn't really start until the prefs, which are only a few months old, (STRC, at $2 billion, was the largest IPO in 2025)