this sounds like a ponzi scheme in the making, or at least not going to end well
(1) Index funds purchase MSTR shares, driving up the price; (2) thus allowing Saylor to issue more debt to buy BTC, which drives that up; (3) MSTR shares appreciate due to its BTC holdings; (4) go to step 1 as funds need to rebalance and add more MSTR shares.
The weak points to this idea are definitely step 2 and even 3. MSTR won't be able to keep finding entities to buy its debt indefinitely, and MSTR is already trading well above what its BTC holdings' appreciation would justify, so there's some obviously unsustainable mania going on.
MSTR is essentially a leveraged, debt laden commodity trust rn, with a highly volatile commodity making up most of its balance sheet.
Their premium to NAV is indeed very high, and makes you think why would anyone buy that vs a BTC ETF. Perhaps if you think BTC goes a lot higher (and stays there) their ongoing leverage and the premium you pay for it now makes sense? Their debt is pretty well structured - v. low interest and matures a long time from now, but remains to be seen how long he can keep issuing it.
He also keeps saying he's never going to sell BTC, but I don't see how he's going to service his debt eventually if he doesn't sell. Unless he starts market making with the treasury or somehow putting it to work
The problem though is that long term, I'd argue that ETH is playing this game a lot better. If you can mentally get past the DAO failure and whatever other drama, programmable money, is the absolute future, especially since they solved the energy usage issue, and soon the scaling issues.
I don't even like Bitcoin and don't own Bitcoin because I have ethical concerns about it. Bitcoin promotes corruption of the socio-political system via extreme, massive-scale tribalism. That said, it's probably the lesser of two evils.
As an outsider, it's ironic to witness fiat proponents neglect the power of corruption which they themselves have been benefitting from to a far greater extent than Bitcoiners.
The side which can exert the most corruption (the will of their tribe), most quietly, will win. Likely Bitcoin since it has the support of the masses and business leaders. Fiat proponents can only blame themselves. They're the ones who made Bitcoin possible with their global ponzi.
I don't like the current system and I also don't particularly like where it's going but the trajectory is clear.
Could you elaborate on what you mean and the mechanism for this?
I've witnessed crypto regulators behave in corrupt ways, but it's impossible to prove bribery until they move or sell their ill-gotten crypto. Because, with crypto, you can receive tokens without your own approval. Someone could send you the passphrase of a wallet containing millions of dollars worth of Bitcoin, it could end up in your email spam folder and you could memorize it and, if ever questioned about it, claim you don't remember seeing that email. There would be zero evidence.
Yet if you remember the passphrase, the Bitcoin is yours.
Given Bitcoin's reason for existence, it's obvious for another reason that "without the the tradfi system, there would be almost no demand for Bitcoin": if everyone trusted that tradfi was a good system and working fairly for all members of society then bitcoin wouldn't have a reason to exist.
Bitcoin, like Trump's popularity, is an FU to a system that's reaching or reached a critical mass of people lacking trust in it.
And that doesn't mean it's good or bad or better or worse, what it means is that people are looking for an alternative to the perceived hopelessness of their futures if they 'stay the course'.
it’s such a curious litmus test for something but I’m not sure exactly what.
Disclaimer: I actually dislike bitcoin (and other proof of work cryptos) very much, but the jury's still out on which side is more correct in their criticism of the other.
PoS ledgers seem like a better design, but they alone don't solve very uneven/concentrated token distributions that you end up with every monetary system
Crypto absolutely will not solve that specific problem of any monetary system. It may solve some others though, in addition to introducing many novel problems
N may be five to seven digits.
religion
politics
they work because people believe they work