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62 sats \ 1 reply \ @freetx 16 Dec \ on: The Bitcoin Perpetual Motion Machine: MicroStrategy (Bloomberg, Matt Levine) econ
The real trick Saylor has figured out is the combination of 3 things (a) convertible bonds (b) ATM equity sales, (c) Accretion. Its that specific combination that seems like a magic money machine.
  • the bonds are 5 year + 0%. So at worse, Saylor only needs to return their premium in 5 years. This means BTC would need to be lower than todays prices in 5 years for their to be concern
  • having said that, Saylor can still use ATM equity sales to payoff bond holders (ie. in 5 years he could just release more shares and pay off bond holders, its not 'mandated' that he sells his bitcoin).
  • the most critical feature of his engine, is that is accretion, not dilution. He has managed to continually add bitcoin per share. For example, if you owned 1 share of MSTR in Feb 2024, that had claim to .00087 BTC at that time....that same share now has claim to .0015 BTC - so you gained 72% BTC holdings by doing nothing!
MSTR is effectively using fiat to mine bitcoin. Its a far more efficient "bitcoin mining engine" then a physical miner (which is now why mining companies are transitioning to this strategy like Hut8, etc).
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0 sats \ 0 replies \ @sangekrypto 16 Dec
so they have used the latest strategy to mine btc?
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