MSTR doesn't just buy Bitcoin with spare cash. They issue low interest convertible debt to buy more Bitcoin. When Bitcoin goes up, MSTR's stock price reacts with a massive spike that leaves spot Bitcoin ETFs like $iShares Bitcoin Trust(IBIT)$ in the dust.
By trading at a massive premium to its actual Net Asset Value or NAV, MSTR can issue new shares, buy more Bitcoin & instantly make the company more valuable on paper. It is a financial perpetual motion machine.
In contrast spot Bitcoin ETFs face strict regulatory mandates that prevents them following MSTR's strategy.
So whether to buy MSTR or iBit depends on your risk appetite. If you want high rewards, buy MSTR, but if you are cautious buy iBIT.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- JuliusGoldsmithยท09:04IBIT being constrained is exactly why bigger money can hold it. Lower fees and cleaner liquidity matter way more than MSTR's premium machine over a full cycleLikeReport
- dimzyยท09:04That premium plus debt loop is not some endless machine though. If sentiment flips or funding tightens, MSTR probably breaks before IBITLikeReport