Crypto’s actions suffered a red day on Friday, especially Bitcoin
Treasury companies as a strategy (MSTR) and Semler Scientific (SMLR): each dropped approximately 6% even when Bitcoin fell only a little more than 2%. The Metaplanet that quotes in Japan is lower by 24%.
The image looks even worse when it moves away: changing from hands to $ 376 on Friday afternoon, Mstr’s shares are more than 30% below its success of all time at the end of 2024, even when Bitcoin has pumped a new record this week.
The price action occurs in the midst of a continuous debate that takes place in social networks about the sustainability of Michael Saylor’s play book (and those that are).
“Bitcoin Treasury companies are fashionable this week. Mstap, Metaplanet, twenty -one, Nakamoto,” said Bitcoin Twitter poster modestly followed, Lowstrife. “I think they are toxic leverage is the worst thing that has happened to Bitcoin [and] What Bitcoin represents. “
The problem, according to Lowstrife, is that the financial engineering that the strategy and other BTC Treasury companies are using more bitcoins is essentially based on Mnav, a metric that compares the valuation of a company with its net asset value (in these cases, its Bitcoin trends).
While its MNAV remains above 1.0, a certain company can continue to collect capital and buy more bitcoin, because investors show interest in paying a premium for exposure to shares in relation to Bitcoin’s holdings of the company.
However, if Mnav submerges below that level, it means that the value of the company is even lower than the value of its holdings. This can create significant problems for the capacity of a company to raise capital and, for example, pay dividends in some of the convertible notes or preferred actions that may have issued.
GBTC tones
Something similar happened to Bitcoin Trust de Grayscale, GBTC, before his conversion into an ETF. A closed end fund, GBTC during the 2020 and 2021 bullish market, was negotiated with an increasing premium to its net asset value as institutional investors sought a quick exposure to Bitcoin.
However, when prices turned south, that cousin became an abysmal discount, which contributed to a chain of explosions that began with the capital of three high -reach arrows and finally extended to FTX. The resulting sales pressure took Bitcoin from a record of $ 69,000 to $ 15,000 in just one year.
“Like GBTC in the past, the whole game now, everything, everything, is to discover how much more BTC these access vehicles will collect, and when they will explode and spit it again,” Nic Carter, partner of Castle Island Ventures, published in response to Lowstrife’s thread.
The thread also activated Mstr Bulls’s responses, including Adam Back, Bitcoin OG and CEO of Blockstream.
“If MNAV <1.0 can sell BTC and buy MSTR and increase BTC/Share in that way, which is in interest holders," he published. "Or people see to come and don't let it go there. Anyway, this is fine."
