A few weeks ago, I started looking at a bitcoin tangential play, and as part of that process I started going further and further down the bitcoin / crypto rabbit hole.
This is a great article. I am of a similar mindset to you. You identified a great reflexivity here though. I didnt think of the MSTR premium, equity issuance, premium machine. Wish I had read this earlier. What's the move now?
To me the hardest thing to get past with crypto markets (besides the, in my opinion, lack of a real use case besides speculation) is just how manipulated the market is by a handful of major players. I don't think most people that are used to regulated US financial markets realize just how much wash trading and tape painting goes on in there, but there are good accounts that do excellent forensic work through things like wallet tracking and it's a massive dynamic.
Also it looks like the MSTR 8-K you linked to indicates that they've tapped out their latest ATM equity offering, so I think we can probably expect an announcement of another ATM facility soon. That might mark a short-term top, but I agree that this has a long ways to go.
I believe one good reason to favor the derivative plays like MSTR is far more favorable tax treatment than owning the coin. However, I am NOT a tax expert, so do your own work!
This isn’t the capitulation that calls the top. When you write the post that you’ve decided maybe this is a new paradigm and you need permanent exposure, I’ll sell then. This is still too hedged to be a top signal.
Good article. I tend to view supply as total crypto market cap, including BTC, Ether, XRP, etc. A lot of the other coins have basically unlimited supply. BTC tends to lead, but other cryptos quickly mop up supply when the speculation gets going...
I did think about this. Prior cycles, there was a natural flow into altcoins as BTC would be purchased via exchange, but seems the Buck stops with the BTC ETFs. I think we will see Bitcoin dominance increase to 60%
Every time BTC seems to be able to 10x it's previous bear market low. Which means it's time to sell at $160K mark!
This is a great article. I am of a similar mindset to you. You identified a great reflexivity here though. I didnt think of the MSTR premium, equity issuance, premium machine. Wish I had read this earlier. What's the move now?
To me the hardest thing to get past with crypto markets (besides the, in my opinion, lack of a real use case besides speculation) is just how manipulated the market is by a handful of major players. I don't think most people that are used to regulated US financial markets realize just how much wash trading and tape painting goes on in there, but there are good accounts that do excellent forensic work through things like wallet tracking and it's a massive dynamic.
Also it looks like the MSTR 8-K you linked to indicates that they've tapped out their latest ATM equity offering, so I think we can probably expect an announcement of another ATM facility soon. That might mark a short-term top, but I agree that this has a long ways to go.
I 100% agree with you, and (not to shill my own work, but its relevant!) wrote up the wild perpetual machine bull case for MSTR yesterday here: https://noconflictnointerest.substack.com/p/how-bitcoin-eats-the-equity-market
I believe one good reason to favor the derivative plays like MSTR is far more favorable tax treatment than owning the coin. However, I am NOT a tax expert, so do your own work!
Fantastic thought process.
Particularly in light of the zero chance of an increase in supply.
Satosi must be well-pleased with his little Fiat Currency Killer.
Big Respect to him…
But definitely share your gentle scepticism.
Thanks.
Brian
This isn’t the capitulation that calls the top. When you write the post that you’ve decided maybe this is a new paradigm and you need permanent exposure, I’ll sell then. This is still too hedged to be a top signal.
Good article. I tend to view supply as total crypto market cap, including BTC, Ether, XRP, etc. A lot of the other coins have basically unlimited supply. BTC tends to lead, but other cryptos quickly mop up supply when the speculation gets going...
Not the ETF demand or the micro strategy demand though
I did think about this. Prior cycles, there was a natural flow into altcoins as BTC would be purchased via exchange, but seems the Buck stops with the BTC ETFs. I think we will see Bitcoin dominance increase to 60%