Ponzi Squared
Bitcoin and Microstrategy are connected at the hip, together they are a Ponzi Squared. Between MSTR and the Wall Street establishment creating numerous Bitcoin ETF’s, that explained how BTC was driven up to and above 100k.
Now it depends on Microstrategy continuously coming up with repeated financing deals just to keep Bitcoin from collapsing. They have used common stock, convertible debentures, convertible preferred, anything and everything to keep getting money to buy more BTC. This latest one comes tomorrow with an 8% yield.
This, after previously getting away with at least one deal with zero interest. They can’t get away with it any longer. This is likely their last one. The well is about to run dry. Bitcoin is likely to selloff, with tech stocks, in February. It doesn’t have to crash, just one of it’s significant corrections. MSTR is so overvalued and leveraged up, it will drop at least double whatever Bitcoin does.
After that, it will be Enron, WorldCom and Bernie Madoff wrapped up into one. As George Burns used to say at the end of his TV show, “say goodnite Gracie!”
Thnaks CM
Do we need to factor in that USA and other soverign nations are there to support Bitcoin now ?
Yes FGC, good point. That support is part of how BTC got as high as it did. Specifically the allowance of the ETF’s. I seriously doubt the US is going to actually buy any Bitcoin. They will probably use all of it they have seized and or stolen for their BTC strategic reserve but they already have that.(If they didn’t dump into the runup to 100k?) Whatever support they provide is more of a management of the decline so it doesn’t become a rout. Microstrategy on the other hand is a dead man walking.
BTC is a symptom of the money printing bubble
Precisely
So I assume the short fund for MSTR called SMST would be a great way to play it’s downmove. It looks like it’s basing around $5 now so any move down on BTC or MSTR will amplify the upmove in the 2x short strategy ETF
Yes, but you have to be careful because of the leverage and they reset everyday. If the decline isn’t sustained and continuous it has decay. Can be tricky.