Article author: Marty Bent Article compilation: Block unicorn

Uber seed round investor and "All In" The podcast's executive producer, Jason Calacanis, publicly warned against Microstrategy's Bitcoin fiscal strategy and the over-the-top advocacy of its CEO, Michael Saylor. Calacanis believes that Microstrategy’s Bitcoin acquisition technology is a Ponzi scheme that is about to collapse, and even questioned whether Microstrategy will become the next FTX.

Earlier today, Jason spent time on Startup of the Week Some time ago, he discussed his concerns about MSTR’s Bitcoin financial strategy, Saylor’s public hype about the strategy, and the fact that other companies, such as Marathon Holdings, are beginning to deploy similar convertible debt strategies. While I can understand that this is disturbing to many, I do think there is a fundamental misunderstanding of what Microstrategy does. I explained this strategy in a tweet last week, and I'll recap it here:

Like it or not, Saylor and Microstrategy have found a A way to expose liquidity pools (especially pools with a mandate to distribute fixed income) to Bitcoin’s volatility through convertible bonds. These convertible bonds have outperformed any other fixed income product on the market.

Other investors took notice and piled into MSTR, understanding that demand for these convertible bonds would increase, allowing Microstrategy to accumulate more Lots of Bitcoin. These investors feel comfortable with MSTR trading at a premium to its mNAV (net asset value) as they believe demand for high-performing fixed income products will remain high and may increase further.

Microstrategy can continue to do this until a competitive alternative comes to the market, as no one else yet offers this kind of scale to fixed income investors ized Bitcoin earnings exposure.

Another important detail is that these convertible bonds have maturities of 5 years or more, while Bitcoin’s lowest 4-year compound annual growth rate (CAGR) is 26%, with its 50th percentile 4-year CAGR The annual growth rate is 91%. If you think this growth trend will continue, this is a pretty safe bet for Microstrategy and convertible bond holders.

In a world run amok by central banks and devalued currencies and expanding debt, it's fairly safe to assume that Bitcoin adoption will not only continue, but grow from Now start accelerating.

What do I think about Microstrategy amassing so many Bitcoins? This makes me a little uneasy, but there is nothing I can do to stop this, Bitcoin will survive in the long term. Even if Microstrategy somehow collapses (which I think is unlikely). Bitcoin is designed to be antifragile.

This is a classic case of: "Don't hate the player, hate the game." Or better yet, join the game. After all, the only way to win is to play the game.

Essentially, Michael Saylor is making a long-term bet on the continued adoption and monetization of Bitcoin and is trying to make the most of it by issuing convertible bonds with maturities over 4 years. It is possible to accumulate Bitcoins in many places. This increases the likelihood that Microstrategy will turn a profit on its Bitcoin purchases over time, as history shows that anyone holding Bitcoin for more than four years has made decent returns. This outcome should be reflected in their stock price, which should rise with Bitcoin, thereby converting their accumulated debt into newly issued shares of MSTR. If the strategy is successfully implemented, it will increase the number of Bitcoins per share owned by MSTR shareholders in the process. (In my opinion, this is the only metric that shareholders should care about.)

Yes, this may seem crazy to many, but to most It's extremely risky, but that's the nature of the free market. Every company is trying to increase shareholder value through calculated risk. Michael Saylor and company are betting that Bitcoin will continue to be adopted, and are leveraging pools of funds that can't buy Bitcoin directly but want exposure to its volatility to achieve their goals. In my opinion, it's a completely symbiotic relationship. Microstrategy is able to accumulate more Bitcoins and increase its number of Bitcoins per share, while fixed income investors are able to leverage the Bitcoin offered by MicrostrategyExposure to embedded volatility results in product performance well above the benchmark.

This may not come as a surprise to you enthusiasts, but I think it's a pretty smart bet. Bitcoin has been around for almost 16 years. It has established itself as an individual, corporate and reserve asset. It is a reserve asset that is completely independent of the will of central planners, transparent, predictable, scarce, and transferable via the Internet. Bitcoin's time has arrived. More and more people are beginning to realize this.

That's the beauty of the Public Company Convertible Bond-Bitcoin strategy that Microstrategy has deployed over the past few years. They are able to leverage external forces outside their core business to deliver value to shareholders. Michael Saylor Even if he stopped buying Bitcoin tomorrow, it wouldn’t affect Bitcoin’s adoption in the medium to long term. He continues to buy Bitcoin and encourages others to do the same because he recognizes this.

Bitcoin is the apex predator on every individual, company, non-profit, or treasury asset. Competing assets are all centrally controlled, easy to manipulate, and are rapidly losing popularity. Earlier today, Fed Governor Christopher Waller acknowledged that inflation has left the Fed helpless. They have no control over it.

Waller may pose that compromise is inevitable, but That doesn't mean what he said is true. There is too much debt and not enough dollars in supply. Annual interest payments on the U.S. federal debt now exceed defense spending. Whether the Fed wants to admit it or not, it will have to devalue the dollar to monetize the debt. If you are using USD as your treasury asset, it is very important to understand this and react accordingly by adopting a Bitcoin strategy. That's what Michael Saylor is trying to get his peers in the public markets to understand.

Of course, his marketing tactics may seem a bit crude to many, and the way he expresses his beliefs through Microstrategy's accumulation strategy may also seem risky , but it’s hard to argue that his core argument is flawed. Especially when you consider that Bitcoin has now officially climbed to the level of being seriously considered as a treasury asset by the world’s most powerful institutions.

I listen to the All In podcast regularly and reallyLove this show. It's a great way to understand how Silicon Valley investors view the world. If I were to give Jason some advice, it would be to take a step back and look at Bitcoin through the lens of one of his most discussed topics on the show over the past twelve months, which is the emergence of artificial intelligence and incorporating artificial intelligence into your business and work as quickly as possible The importance of process so you don’t fall behind. The same mindset applies to the rise of Bitcoin as the dominant reserve asset.

If everyone, every company, and everyone wants to succeed in the future, they must adopt Bitcoin’s asset reserve strategy instead of storing the fruits of their labor. In a currency or currency-like asset that does not maintain purchasing power over time. This is crucial. Just because Saylor recognizes this and actively moves to realize this understanding through his corporate balance sheet while also touting this strategy, doesn't mean he's wrong.

As I said in a tweet last week, I personally prefer to hold real Bitcoin. But that doesn't mean Microstrategy and other companies haven't found something unique and legitimate based on their circumstances and certain financial tools at their disposal.

Final thoughts...

For this long pause, I Deeply sorry. Over the past month, I’ve suffered from severe writer’s block. But I think this time away from the keyboard will be beneficial to me and the quality of future articles in the future.