Mstr’s profits came out on May 1. My morning media stops last Thursday (here and here) asked for a preview. We do not talk about actions, so I planned to get away and get to topics. While preparing me, I had to suppress the Eye roll reflexes That is triggered.
Mstr, of course, is the Ticker symbol for Microstrategy, or strategy, as the company is known. The strategy, led by Michael Saylor, was a pioneer in the “Bitcoin Treasury” model that has now been copied by Metaplanet and dozens of other companies. The strategy plans to raise $ 84 billion, according to its most recent announcement, between capital and fixed income instruments.
There are three questions here:
1. Earnings?
The “profits” and “price objectives” of Mstr are … well, they really do not mean the same, especially once the effect of ASC 2023-08 is withdrawn. It is only the price of Bitcoin and the financing, simple and simple. Wall Street analysts and experts should do it well.
2. Strategy?
You can’t simply say, “Strategy. “You have to say”Strategy; You know, I used to be Microstrategy. “As Prince, Puff Daddy, Kanye West and Twitter. NB: people say” strategy “(small” s “) already.
3. Don’t be an enemy?
Mstr admits a market capitalization of $ 107b with Bitcoin Holdings of $ 53b and good will of laser eyes. Without lifeboat, without parachute, without apparent plan B. If it fails, the Bitcoin market could assume the fault.
Despite the revealing (and some gift coverage), we can agree that:
– Capital increases are really incredible. The force is strong in this.
– Mstr has increased by 36% in the year, compared to less than 5% for Bitcoin. Who am I to launch stones?
– Mstr skillfully uses the volatility of the price of shares as a characteristic, not an error, for 1) to emit delicious converts, 2) attract volume of options listed and 3) corporate strategies of “performance”. (Please, stop the sale of options for a “performance strategy”. And I said “strategy” again. Small “s”.)
– The favorites (Strk and Strf) gave in the target with some people who like the favorites. Some of my favorite friends are in love.
Mstr created a movement
The strategy (great “s”) has not only created a movement, but a category. The ETF MSTR leveraged (including this new one that pays “income”) serves to the market for whom the volume of the 70s of Mstr is boring. Grayscale announced an ETF that tracks 30 companies that have at least 100 bitcoin.
Last but not least, Cantor Equity Partners, a SPAC, is merging to form twenty -one capital, which will have $ 3 billion in Bitcoin. Mention this trend in a room full of experts and shout “Gamestop!” In unison. It’s fun.
All this is fine. Add Bitcoin to the treasure of companies that are not encrypted* It is an interesting trend. (And that does not include crypto-national companies, such as the parent company of Coindesk, Bullish).
But it’s just bitcoin at this time.
USA. (Bitcoin) Exceptionalism
Despite the loosening of US regulatory zipes in digital assets and the recent gust of ETF presentations, Bitcoin still dominates conversation (it still represents approximately two thirds of the total cryptocurrency market).
Once again, it is fine if we are talking about an asset of the value store that contributes to a corporate treasure assigned to cash and treasures. However, the growing number of flavors of exposure to Bitcoin (investment, performance, optional, protection) are taking the place of education about what other blockchain assets hope to deliver and why it is important to spend more time thinking about the asset class.
Until recently, that was unsuccessful for many investors and advisors, since the implementation of the brokerage account or future was not available. (Of course, it has been for ETH, but it needs more than ETH to think about the “class of digital assets.” The lack of enthusiasm for ETH investment vehicles, we believe, has fought in part for this reason).
If 2024 was the “leaving” year of Bitcoin, we hope that 2025 will provide investors and merchants opportunities to think more deeply and more widely, and implement accordingly. Otherwise, the US cryptocurrency investment narrative will begin to sound like a “Bitcoin Maxi”, and that feels like leaving money on the table.
