New Article >> This is the Way The World Ends
https://petermccormack.substack.com/p/this-is-the-way-the-world-ends
Absolutely, well said.
One additional reason housing is so expensive in the UK is not particularly a shortage of housing. It’s because housing is actively being used as a form of money, as the designated money itself is no good at storing value. Everyone knows this and acts upon it even if they don’t really know why. How many boomers do you know still living in houses far too big for them? Stamp duty is also a huge deterrent to move for some.
Fix the money, fix housing.
Satsuma Technology’s decision to sell a significant portion of its Bitcoin holdings to cover an upcoming convertible loan repayment reflects a structural issue common to many corporate treasuries. When companies acquire Bitcoin using debt or issue convertible instruments to expand their positions, they introduce fixed liabilities that do not adjust to market conditions. If prices fall or remain flat, servicing these obligations requires liquidation of the asset they intended to hold.
This behaviour shows a misunderstanding of Bitcoin’s role. Bitcoin was created as a monetary base that removes counterparty risk and maintains purchasing power over long horizons. It was not designed to support leveraged strategies or to replace operational revenue. When firms treat Bitcoin as a substitute for future productivity, they expose themselves to the same liquidity pressures that affect any leveraged asset.
The broader trend is becoming clear. A majority of corporate Bitcoin treasuries are now in unrealised loss positions. These entities relied on appreciation to justify their strategies, but appreciation cannot be guaranteed in the short term. If their liabilities mature faster than their assets recover, forced selling becomes unavoidable. This outcome results from the leverage, not from Bitcoin itself.
As long as companies attempt to use debt to accelerate accumulation, similar situations will appear. The incentive to grow holdings quickly conflicts with the discipline that hard money requires. A system based on fixed supply rewards long-term saving and productive output. It does not reward attempts to compress that process through financial engineering.
Bitcoin remains neutral. It enforces no leverage and provides no protection to those who assume it. When firms borrow to acquire a monetary asset, they turn a stable store of value into a speculative position that must outperform the cost of capital. If the position fails, the coins are redistributed to holders without such constraints.
One bitcoin remains one bitcoin. Its design does not accommodate the pressures that arise from debt cycles or market expectations. Companies that align with these principles will be more resilient. Those that ignore them will continue to discover the limits of using leverage to accumulate hard money.
https://www.perplexity.ai/page/uk-firm-sells-half-its-bitcoin-BEzvfehhRaCtNUYmHnW5Ag
This is all spot on; I’d just add that companies are not necessarily the distinct problem here - there are plenty that stack bitcoin with zero leverage. Plenty of individuals get over their skis with leverage also, trying to accelerate their stack. And max pain is often the result and they get sniffed out.
Important to note when Saifedean said this he was talking about on chain Bitcoin. Don’t think it shows him to be a store of value maxi.
A new article of mine published in Bitcoin magazine - the return of the Tontine!
Could be a very interesting development in the pensions space and a logical option for bitcoiners in retirement also.
#tontines
#pensions
Is your issue with $NAKA, or the entire concept in general?
Can’t deny the above always felt scammy and laced with insiders with such a huge PIPE proportion.
But then, if you run a business, is it a good idea to hold Bitcoin on the balance sheet?
Corporations will always exist - a hyperbitcoinised world will just place the bar for investing in companies that much higher than in the Fiat world now.
Yes, there will be scams. But the well run will serve to put the rest of the corporate world on notice.
Wrote a piece for the Bitcoin collective on this area last week - would love to hear your thoughts
https://bitcoincollective.co/bitcoin-treasury-companies-ponzi-or-adoption/
Yeah, I think long term most of these companies will fall by the wayside and won’t attract investment unless they provide real value in the world. For the time being though, as we are early even just offering exposure to btc in wider markets than previously available is being treated as valuable.
Agreed on 1,2, and 4 especially - a complete red herring if countries are running deficits - it’s far more instructive to make Bitcoin ownership as easy as possible for every individual who is not running a deficit themselves.
On Bitcoin Treasury Companies though - I think it pays to think long term. Corporations and potential investment in them will always exist. It’s only natural that investments in these companies pop up as an option (essentially priced in Bitcoin) relative to just saving in Bitcoin. You may end up with more or less Bitcoin than you invest - like any investment - buyer beware of course. But it’s a pretty natural state of things that these will pop up and try and acquire Bitcoin - especially when tapping into other capital pools (fixed income etc) that can’t otherwise access it, as Saylor is doing.
Absolutely. It’s been a text book of how to build up a Bitcoin treasury company - honesty, integrity, transparency, and by the look of it a tonne of hard work.
Yes I’d generally agree - I think one point around this being - at what point of MNAV compression would you stop using the ATM like facility?
Of course it’s a balancing act but I sort of have the view that you increase the stack almost no matter what at this stage. 10k btc has to be the next target.
Thoughts on SWC Bitcoin based convertible debt as announced this week in the UK..
This is a loan of $21m worth of Bitcoin, so let’s say around 180 btc and increases their stack around 8-9%. It’s at zero interest in Bitcoin terms.
The conversion sits at 5% above the equity price from the lenders point of view, and can be triggered once 50% above from the companies point of view and only after 6 months for this latter option.
Basically, the binary way to look at it is as to whether it converts or not - if it does, the company gets an extra atm at around 200p. If not, the loan just gets paid back with minimal loss in Bitcoin terms.
Why would the lender convert? If the shares have performed better than btc.
Why would the company convert? As long as the effective purchase of bitcoin at the conversion price is accretive to shareholders.
Strikes me there are some edge cases where the lender could lose in btc terms but they are marginal - eg equity goes up 55%, but btc goes up by even more - lender ends up with the shares and not the btc?
Be interesting to see if there are further of these and on slightly better terms for the company - ie ends up being a more accretive atm if converted.
#swc
#btc
The audacity of $STRC / Stretch, allowing the market to set the interest rate🤯
Somewhere up in the clouds Mises, Hayek and Rothbard have read the prospectus… and they’re smiling.
nostr:nprofile1qqsyx708d0a8d2qt3ku75avjz8vshvlx0v3q97ygpnz0tllzqegxrtgpr3mhxue69uhkummnw3ezucnfw33k76twv4ezuum0vd5kzmqpr4mhxue69uhkummnw3ez6ur4vgh8wetvd3hhyer9wghxuet5djh9ay
Ha ha yes I noticed this earlier. They will go to great lengths to confuse Bitcoin and Crypto as terms; it’s 100% deliberate.
My mistake😆.
Clearly she is onto something..
295 billion teeth 🦷 in the world (approx)
Only 21 million Bitcoin.
Gotta love the FT🙄
cc nostr:npub1lr2zzf989mvf393y0tv39ara6a4vddkd6y87z784up9vl6ks6j3qtudl6a
Agreed. It’s akin to people saying “never sell your bitcoin” without considering that if you’re on a bitcoin standard, there will be inevitable times in life when you’ll have to spend more than you acquire anyway.
However, in the yield argument they are ignoring the opportunity cost of owning more btc (or mstr, if that way inclined) in the first place.
Lots of fairly inane chat about #msty at the moment. Just bear in mind what the underlying is, and that in general terms, at
varying times in the market buyers of calls can profit, sometimes sellers of calls, but unlikely both at the same time.
My conclusion is that MSTY holders are likely to end up underperforming #MSTR, and are likely thinking in $ fiat terms.
Just like a trader who buys Bitcoin at 10k, sells at 20k, buys at 30k, sells at 50k, buys at 60k sells at 80k, and probably thinks they are some sort of genius.
#bitcoin
Massively degen, yes! But not obviously a scam? As in, he can explain where the yield comes from and at least there’s no native token?!
