Bitcoin is heading towards $100,000, but the crypto trading group is very quiet. After Trump's election, everyone was expecting a surge in liquidity, but apart from the meme hype activated by Binance, all altcoins have been left far behind by BTC. Why? Why has Bitcoin been rising recently, while altcoins have been falling, and when Bitcoin falls, altcoins still fall?
The answer may lie in the $MSTR stock.
MicroStrategy buying Bitcoin is not a new phenomenon in the crypto world, as it has become a BTC index in the US stock market since the last cycle. However, in September this year, MSTR has once again attracted market attention. This time it is because MSTR actually started up before the rise in Bitcoin price, and has maintained a persistent premium over Bitcoin in the subsequent market.
So many people have started discussing why MSTR has a premium. In fact, MicroStrategy has quietly started a new Bitcoin buying strategy since the middle and late last year, called "premium issuance".
Related reading: "Debt-financed Bitcoin buying" strategy hasn't changed, so why has MSTR's premium suddenly soared?
In simple terms, MicroStrategy has previously been raising funds through debt issuance to purchase BTC, which means that each MSTR share represents a certain amount of BTC (which is also why it is seen as a US stock BTC index). However, the "premium issuance" model is much more straightforward and immediate: when the Bitcoin price rises and the company's market value increases, the exchange rate between MSTR and Bitcoin will generate a premium.
At this point, the company issues more MSTR shares to buy more Bitcoin at a premium, so that each MSTR share corresponds to more BTC, which in turn means that the company's market value and the value of MSTR will also rise, and then the cycle repeats, creating a flywheel effect.
In a nutshell: the more MSTR is issued, the more valuable it becomes.
What does this have to do with the Bitcoin bull market? Apart from the fact that MicroStrategy accounts for 5% of the total circulation, the US stock market seems to be experiencing a Paradigm shift. MicroStrategy CEO Michael Saylor has been emphasizing throughout this year that there will be more and more MSTR in the US stock market, and he calls his model an "infinite money glitch". At first, many people did not take it seriously, but recently when giants like Microsoft have also started exploring "Bitcoin treasury", you can feel the gears of fate starting to turn.
That is to say, if Saylor's vision continues to become a reality, more and more US companies will adopt the "premium issuance" Bitcoin treasury model, and the Bitcoin price will be further tied to the US stock market. And this massive liquidity will be entirely absorbed by the BTC asset, with no relation to other altcoins (which is also one of the reasons why Bitcoin ETF inflows have surged recently, while Ethereum ETF has remained calm).
It can be foreseen that if the crypto industry stops in its tracks in terms of narrative innovation and execution, Bitcoin will gradually drift apart from Crypto. In this broader context, the bull market will only have two betas: one is Bitcoin, and the other is Solana, which absorbs the liquidity within the circle.
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