Anton Golub’s Post

Debt level is an essential LTV of 20%, that is with Bitcoin down here (80k)… he did have collateralized debt during FTX collapse and that did cause a few goosebumps… he learned a lesson there and now no remaining debt is collateralized (ie margin call risk) So at that LTV you need to see Bitcoin fall to $16k for his debt to be 100% of NAV. You would also need that price to persist for 3-6 years based on the maturity profile / put profile of the CBs for it to require him to sell any bitcoin. How do you propose this death spiral happens against those dynamics? I am interested.

Love ya. BUT. You’re analysis on the matter, is pretty weak. Let me help you out. Below is the CME call options. He could spend just $500M and buy Dec 2026 put options which cover him when BTC falls to $40k. That would give him hedging coverage of the majority of debt. Your analysis assumes complete inaction, and presumes he doesn’t already have options. It also assumes a $2T asset class is going down 90-98%. Both are wild calls. Make for great headlines, but bad maths. FYI: Comparing LUNA is comparing Tulips to Gold.

Yes, but what if Bitcoin actually soars? 🤔 Imagine a scenario where BTC doesn’t just inch upward, but skyrockets—doubling, tripling, or even quadrupling in value, as many crypto enthusiasts predict. What if Saylor, instead of his aggressive BTC acquisition approach, decides to ease off on new purchases and adopts a more patient approach? If BTC’s value multiplies, MicroStrategy’s holdings could see astronomical growth, potentially turning their bold strategy into a legendary success story. Such a surge would validate Saylor’s controversial “Bitcoin as a reserve asset” approach, possibly influencing other corporations to follow suit. Then with significantly appreciated assets, (Micro)"Strategy" could have more options—from reinvesting profits to paying dividends or funding new ventures.

Smells like LTCM

There is no institutional liquidity in bitcoin. The ETFs are retail FOMO demand. However, inflation is high and the three things going for bitcoin are 1. Almost everyone knows it exists now. 2. You can move it anywhere when things go belly up. 3. It, so far, has limited supply so is a store of some value

You mention that HFs trade volatility. I guess this happens either through Gamma scalping or simply selling back the options embedded in converts. So why is this supposed to work only in bull markets? Vol trading is not directional.

Dear community, So far it seems it can actually hold for quite some time : 1. Lenders of the first 3BUSD have an incentive to exercise the convertibility since conversion price is significantly lower than the current share price (in Grey and Green), the margin is so wide that even if it will affect the share price, these 3BUSD will not force any bitcoin sell. 2. The next 5BUSD are an issue below the conversion price but it is due in 2029 and 2030, so 0 risk before that, what we talk about is in any case not an imminent threat i.e. he can play the bitcoin king for quite some with the number of companies and states buying BTCs between now and end of 2029. 3. Now even if Bitcoin would go to say 20B in assets (meaning divided by 2 so at 40kUSD per bitcoin) in 2029, the 5 BUSD would only represent a leverage of 25% (5/20), 99% chance he can roll that debt and even if he can't, you can sell 5BUSD of bitcoin in this market and not affect the price so much. So conclusion : if he were to stop now (43BUSD is not enough ?), this is a brilliant trade and in any case it won't affect bitcoin price due to its length (2029/2030), the size at risk (5BUSD on a 1.6T asset) and the possible roll (12% leverage so far).

Good post. Have seen a few counter takes on the liquidation risks, incl forced via debt obligations, but it seems those terms buy a few years time OR “fundamental change at the company” which seems unlikely given his shareholder position. If you’re a sats stacker, never mad at steep discounts tho. SOURCE: https://x.com/kobeissiletter/status/1894444656483533187

Anton Golub I'm glad you're covering this so extensively. I'm not as concerned though but perhaps I'm missing something. Since the notes don't mature until 2028 doesn't that protect Strategy from having to sell anything until then? Even if the price of BTC or Strategy stock absolutely craters? IMO the real opportunity is to let the markets irrationally punish Strategy stock until it trades below it's balance sheet value. Then buy it cheap.