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I figured out the real risk with Saylor’s plan to issue stock/debt to buy BTC and pump the value of his stock/debt: it exposes and therefore blows up the entire system.

Everyone is trying to find the glitch because you can’t just get money for free, but the glitch is in the system itself, and he’s not just exploiting it in a roundabout way like Buffett, but using it to power his strategy directly.

Because once it becomes obvious to everyone what he’s doing, you will have no choice if you want stocks and debt to buy his. You cannot buy T-Bills, you cannot buy AAPL.

AAPL just makes products and profits which generate cash flow which fill the balance sheet with depreciating dollars. All those steps just to get something that’s melting away. By the time they buy BTC it’s too late. They’ll never catch Saylor.

The problem for MSTR is when everyone catches on there will be a stampede, and then all hell might break loose. The normal laws of physics no longer apply around a singularity.

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Discussion

f0xr 11mo ago

💯

During the gold standard era, when banks created too much credit, the inevitable crash didn't destroy gold. It destroyed the fractionally reserved fiat banks.

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d9d57cc0... 11mo ago

He’s leveraging the broken incentives of inflationary currency and depreciating dollars to build a fortress of hard assets, and once that playbook becomes clear to the masses, it could trigger a scramble unlike anything we’ve seen. Traditional companies like AAPL, tied to cash flows and physical products, suddenly look sluggish in comparison to a strategy that bypasses those steps entirely by going straight for a monetary apex asset.

expat83 11mo ago

I bet he’s really worried about it

Sat Nakamoto 11mo ago

What is this hell that might break loose?

Chris Liss 11mo ago

don't know, too hard to predict what happens after the stampede.