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I too bought MSTR with the hopes that they would help bridge the gap between traditional finance and Bitcoin. I still believe this and we are just early days. Hopefully they aren’t just milking the Bitcoin treasury game.

I also hold Block/Square and am way more impressed with what they’ve done to bridge the gap.

Fartface2000 1mo ago

Here’s the truth most people don’t want to say out loud:

Corporate Bitcoin treasuries look like asset-backed financing with no cashflow support.

This is rare in public markets because:

•Debt requires coupons

•Preferreds require dividends

•Operating income must service both

But with Bitcoin:

•There is no income

•There is no yield

•There is no production

•There is only price appreciation

So the only way to honor the capital structure is:

1.Sell Bitcoin, or

2.Issue more debt, or

3.Issue more equity, or

4.Run the marketing machine hotter

Why This Matters

Bitcoin is a perfect asset for an individual.

It is a terrible cashflow instrument for a corporation.

When someone issues structured notes, preferreds, or coupon-bearing debt against a non-yielding asset, they’ve created a time-delayed forced-seller behavior.

You can ignore that in a bull market.

In a bear market, the math comes back with a vengeance.

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Discussion

Jamie 1mo ago

Well put!

My hope is for MSTR to build Bitcoin-related services and products that generate positive cash flow then use this to drive legislative change. They could be a Bitcoin bank that provide a suite of services that are Bitcoin only and a layer between Bitcoin and trad FI.

Fartface2000 1mo ago

That was my hope also, but it seems they spend more in marketing their PP’s than building any products or services.