As the current cycle reaches its midpoint, people are suddenly realizing that MicroStrategy's strategy of hoarding BTC has been widely imitated by numerous listed companies, potentially becoming a historical driving force for super Bitcoinization.
Listed companies are beginning to fall into a prisoner's dilemma of scrambling for tokens. First come, first served; latecomers will find it difficult.
It is reported that listed companies have already accumulated nearly 770,000 BTC, and this number is rapidly growing at a rate of 10,000 per month. At this pace, their total accumulation by the end of the year is expected to exceed one Satoshi Nakamoto, approximately 1-1.1 million BTC.
MicroStrategy alone has accumulated nearly 600,000 BTC. It seems to have found a perpetual machine strategy of using its stock's net premium to continuously buy more BTC: Buy BTC (electronic gold) => Increase BTC per share => Stock price rises => Issue more stocks, obtain financing => Buy more BTC => Repeat the cycle...
Then it and other companies, such as Japan's Metaplanet, issue low or zero-interest bonds to obtain financing from the market, add positions in BTC, injecting additional fuel and momentum into the above cycle.
To the extent that many people are now claiming to create various Altcoin versions of MicroStrategy, essentially meaning MicroStrategy-style accumulation of different Altcoins, such as the US-listed company SharpLink Gaming hoarding ETH, etc.
I suddenly thought of its reverse version: an Altcoin version of MicroStrategy. Imagine if there was an Altcoin project that has successfully issued a token in the market, whether a project coin, meme coin, or air coin, with essentially no actual business value backing it, similar to MicroStrategy's software business being barely meaningful. This Altcoin project then begins to learn MicroStrategy's BTC hoarding model, buying BTC as a project strategic reserve, increasing BTC per token, thereby boosting token price. As the price rises, the project or community treasury's locked Altcoin reserves can be exchanged for more BTC. Thus, selling its own Altcoin in the secondary market, acquiring more BTC, further increasing BTC per token, and so on...
So, can this Altcoin potentially skyrocket like MicroStrategy's stock price due to its BTC hoarding strategy?
This is not an easy question to answer. It seems not every company imitating MicroStrategy's model has seen its stock price rise due to BTC hoarding.
In MicroStrategy's perpetual machine cycle, the most mystical link is probably that an increase in BTC per share leads to stock price appreciation, thus obtaining net premium?
Without net premium, financing cannot be sustained. If financing cannot continue, the perpetual machine cycle will be forced to stop. The generation of net premium comes only from buyers in the secondary market believing that MicroStrategy's BTC per share will continue to increase. This becomes a circular argument.
Especially when there are already many professional BTC spot ETF products in the US stock market, the argument that buyers choose MicroStrategy as an alternative investment because they cannot conveniently buy BTC directly seems somewhat pale.
Holding an ETF means entrusting the holding of a certain amount of BTC, which is determined by the ETF mechanism.
Holding MicroStrategy stock is probably not just about trusting CEO Michael Saylor's character, but more importantly, believing in his ability to continuously find ways to issue fewer stocks and buy more BTC in the future.
Thus, the appearance of net premium is conditional. The disappearance of net premium may also be the death knell.
Market reflexivity makes a glamorous appearance in an unprecedented way.
Fundamentally, why can BTC hoarding support stock or token prices without spiraling into its opposite, a death spiral?
I vaguely remember the last person who tried to hoard BTC to support token price was LUNA's founder Do Kwon.
The market players targeting LUNA precisely used the excess LUNA token issuance to exchange BTC positions as their entry point.
BTC supported LUNA, LUNA supported UST. From base to top, the inverted pyramid was on the verge of collapse. With the bottom pulled out, market panic, UST bank run, LUNA's infinite issuance, token price quickly dropped to zero.
MicroStrategy's BTC position is currently valued at around $65 billion. Its US stock market value is as high as $111 billion. This is current position value, not net value, without considering liabilities.
Perhaps from MicroStrategy to LUNA, only a product like UST is missing.
If someone were willing to create an Altcoin mimicking MicroStrategy's BTC hoarding model, it would indeed be interesting!
Or perhaps every previous Altcoin, meme coin, or on-chain meme coin, as long as the market maker still holds tokens, could potentially imitate the MicroStrategy model to seek a resurrection?
