On valuing leveraged BTC equities (LBEs)
Q1 financial reporting for companies such as Strategy and Semler Scientific will record marked-to-market gains on BTC holdings as income.
Strategy has ~$46b in BTC - a 10% gain in BTC’s price would mean ~4.6b in income.
Strategy is also accumulating bitcoin aggressively. So far this quarter, they’ve grown their BTC stack by 4.1% on a fully diluted basis, equaling roughly $1.8b at today’s BTC price of $97k.
For valuation purposes, the gains from Strategy’s BTC stack, the rate of adding to their BTC, and assumptions on the price of BTC are paramount. Let’s go over each quickly.
If BTC appreciated to $107k by the end of the qrtr, a 10% gain from current prices, and still below ATH’s, MSTR could report ~$4.6 in income from the appreciation. With an S&P average forward earnings multiple of ~24, MSTR would be valued around~$441.6b. It’s currently at $84.4b
On top of the BTC hodling gains, let’s say, hypothetically, that MSTR manages to grow its BTC by 5% in Q1 2025. That’s roughly 23,158 BTC. Using the assumption of $107/BTC, that’s ~$2.4b.
Using S&P average forward earnings multiple of 24 again, MSTR would be worth ~$230b based on their accumulation strategy alone.
When added together, the suggested market cap of MSTR would be approximately $671b, given the previous assumptions and a P/E ratio of 24.
And that’s throwing in the enterprise software business in for free.
The price per share, at current outstanding share count, would then approximately be $2,655.
Compared to its current price of 334/share, I’d say the company is significantly undervalue.
I like the stock.
NFA.
P.S. if MSTR records $7b of income for Q1 2025 and its market cap is roughly the same, they will have a P/E ratio under 5. For context, other NASDAQ 100 companies routinely have P/E ratios above 30.
Gm nostr fam ☕️ ☀️
Today’s my four year anniversary in Bitcoin.
Feb 9, 2021 — I was venting to my dad about how our whole system seemed corrupt and broken. How could we have the entire economy shut down from COVID lockdowns and still have a soaring markets? He suggested I look into bitcoin, an internet money with a supply cap of 21M divisible units. At that time, 1 bitcoin was worth roughly $50k.
The rest is history. Thanks, Dad.
200 pushups a day until $0.2M
Hardest money ever #bitcoin
200 pushups a day until $0.2M
Hard body, hardest money ever #bitcoin
200 pushups a day until $0.2M #bitcoin
200 pushups a day until 0.2M
Can’t tariff pushups, can’t tariff #bitcoin
Gm nostr fam and happy Sunday ☕️☀️
You can tariff precious metals, agricultural goods, alcohol, specialty AI chips, and all other manner of imports/exports…
You can’t tariff Bitcoin.
200 pushups a day until $0.2M
Hard body, hardest money ever #bitcoin
Teleportation. Anywhere, instantly.
200 pushups a day until $0.2M
The hardest money ever #bitcoin
200 pushups a day until $0.2M
The hardest money ever requires strong people. #bitcoin
Glock19 is great. It’s not too large that it’s unwieldy, and it holds 16 rounds of 9mm with standard magazine. Extremely reliable and intuitive to use.
200 pushups a day until $0.2M
Hardest money ever #bitcoin
Gm nostr fam ☕️
Cheerful and constructive. We have checkmate, so enjoy the rest of the game while the world slowly realizes it.
200 pushups a day until $0.2M
Hard body, hardest money ever #bitcoin
What you measure is what you manage.
Have more bitcoin than you did:
Yesterday
Last month
Last year
Last cycle
They can do this without holding it, yeah? If they hold the asset, then governments’ incentives are aligned to ensure best possible treatment for the asset in its jurisdictions. Just my 2 sats.
How do you suppose government(s) will control bitcoin by holding it? Through regulation?
I’m of the opinion that governments can’t control/change bitcoin, therefore bitcoin will change governments
Gm nostr fam ☕️
I’ve been slightly absent recently as I’ve been finishing up my Master of Finance degree. It’s been a wild ride to learn even a little bit about this monstrous Financial Leviathan.
I’ve never been more convinced that #Bitcoin already has the global financial order in checkmate, most simply don’t see it yet.
Nine day consolidation over $100k is nasty bullish. Keep calm, stay humble, avoid leverage, and stack sats.