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Monteluna
@monteluna
MicroStrategy really is tradfi's OlympusDAO. Convertible bonds as they have converted, have diluted 40% more MSTR shares, but like protocol owned liquidity, the cash used in purchasing shares goes back into the balance sheet of the company. The key points are: 1. The shares are trading above NAV, but MSTR receives the premium. They are the main sellers in the market. 2. As the shares trades above NAV, the premium is used to buy more bitcoin. This is the "Bitcoin yield" Saylor discusses since each the ratio of Bitcoin per share keeps going up. 3. The suckers at the table are corporate debt bond traders since they effectively are doing a volatility swap, but they're earning a yield far better than the corporate debt market's average rates. What worries me is this may suffer the same fate of OlympusDAO if MSTR trades below NAV. Also, I'm sure the bond traders are leveraged up. Surely nothing can go wrong here. 😅 https://youtu.be/u3oT_IevEGU?si=taYqVELmLirWuv29
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HH
@hamud
So when mstr pops it will bring down the entire industry with it.
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Monteluna
@monteluna
So I think the causation would be in the reverse. Something would have to happen in the world to cause an 80% drawdown in Bitcoin price. The conditions necessary for MSTR to pop is actually something just absolutely destroying the crypto market, which at this point after everything has been thrown at it, probably only leaves existential threats. If whatever causes an 80% drawdown in Bitcoin happens, you probably have more stuff to worry about than MSTR stocks. 😅
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