Subnostr

The MicroStrategy #bitcoin playbook works for companies with steady, recurring cashflows. SaaS works. Oil and gas E&P works. Logistics works.

Bitcoin mining? Not so much. Cashflows are too volatile to cover the debt obligations.

I’m skeptical of MARA’s recent announcement. Makes me think they’re working to offset some short term liquidity issues. Also, they’ll use the added liquidity (if they can secure it) to ride this next bitcoin bull run and likely enter into a different business (i.e. energy).

But the MicroStrategy playbook works because MicroStrategy can DCA and smash buy without reliance on bitcoin price for their cashflows. This won’t end well for MARA without some major adjustments to their business model.

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Discussion

CitizenPleb 1y ago

Short term cash flows sure, but the debt obligations are years out. Seems like they are diversifying revenue streams as well into Energy and AI.

All that said, miners have certainly been an investment minefield. (See what I did there.)

Brock 1y ago

Every company can’t employ this strategy. As the strategy gets crowded, the market will function similarly to debt markets … at the extreme, if ExxonMobil decides to deploy it, then capital will choose them over Marathon bitcoin mining doing the same strategy. The stability of cashflows is paramount to the fiat debt to build a treasury reserve strategy and bitcoin miners have nearly the opposite dynamic.

CitizenPleb 1y ago

Right, the question is, when does a large player with tons of cash flow (and or growth) enter the market.

Nathan 1y ago

Agreed. I think it’s a pretty crazy idea and eventually they will blow up. But I’d happily be wrong about that.

Btcfeen 1y ago

Generally agree but I think Mara is doing it at an opportune time. And they can always sell it on a double or triple. If they are going to do it now is the best time. They’ve already gone deep in machines during the bear which is also the right move