I. Preface:
MicroStrategy was initially an enterprise software company focused on business intelligence solutions, but since 2020, its focus has significantly shifted to Bitcoin investment. The company has raised funds by issuing stocks and convertible bonds to purchase Bitcoin, making it a focal point in the US stock market.
On February 6, 2025, MicroStrategy, the global listed company with the most Bitcoin holdings, officially announced a name change to Strategy (referred to as MicroStrategy for readability in the following text). At the time, data showed that Strategy's balance sheet held 471,107 Bitcoins, approximately 2% of the global Bitcoin total supply. By February 21, 2025, MicroStrategy had accumulated nearly 500,000 Bitcoins, valued at over $40 billion.
Essentially, MicroStrategy transforms the stock market into a Bitcoin withdrawal machine through capital structure design - raising funds by issuing new stocks/convertible bonds to increase Bitcoin holdings, and then using Bitcoin positions to support stock valuation, forming a capital closed loop deeply bound with crypto assets. Leveraging this high-premium financing mechanism unique to US stocks, MicroStrategy not only dominates the Bitcoin concept stocks but has also mastered a "alchemy" certified by the US stock market through equity issuance and price manipulation.
II. What is the "Magnet" of MSTR Stock Speculation?
...Saylor is not limited to Bitcoin. Some in the market believe that his latest remarks indicate support for the development of the entire digital economy, proposing that the United States should become a global digital economy leader and promote the tokenization of all assets. He is no longer just a Bitcoin extremist but sees the potential of blockchain technology in broad fields. This open attitude has also gained him more recognition in the blockchain industry.
Looking at the United States' layout for the future digital economy, Saylor even proposed incorporating Bitcoin into national strategic reserves to further expand the U.S. leadership in the global digital economy. He not only promotes Bitcoin but also presents a vision of a global on-chain economy, showing that the future global economy might move towards a more decentralized financial landscape, and potentially even a cyber financial system that transcends sovereign nations.
However, under this future landscape, capital flow and regulation will face new challenges. Especially if the United States leads this on-chain economy, other countries or organizations like China, the European Union, or South Korea will face greater capital outflow pressure. Even if regulatory agencies attempt to control capital flow through traditional means, these methods will become powerless in the face of a decentralized on-chain economy. On March 25, Trump's family crypto project World Liberty Financial Inc. (WLFI) officially announced plans to launch a stablecoin USD1, as the stablecoin business is extremely profitable, and USD1 will be 100% backed by short-term U.S. government Treasury bonds, U.S. dollar deposits, and other cash equivalents, which seems to openly suggest that the U.S. will increasingly use stablecoin issuance to alleviate the U.S. debt crisis.
IV. Möbius Loop, Michael J. Saylor's Asset Speculation
Today, Bitcoin's price has dropped to around $87,000 from its high, while MicroStrategy's average purchase cost is approximately $66,000. This raises the question: What would happen in the market if Bitcoin's price falls below MicroStrategy's purchase cost?
[The translation continues in the same manner for the rest of the text, maintaining the specified translations for specific terms and preserving the original formatting.]V. Wealth Engine or Crypto Frost?
MicroStrategy's capital operation model is timely, but can MSTR's stock be participated in? In my personal opinion, for crypto industry insiders, MSTR's odds are greater than directly participating in Bitcoin. MSTR is more like an accelerator version of Bitcoin.
On the surface, MicroStrategy is a software company focused on business data analysis, but its operational model has completely shifted to Bitcoin asset hoarding. MSTR carries a leverage effect. Because the company holds a large amount of BTC and may increase its holdings through borrowing or bond issuance, this amplifies its stock price's sensitivity to Bitcoin price fluctuations. When BTC rises, MSTR may rise even more, and vice versa.
Its stock has soared from $68 at the beginning of the year to around $400 now, a surge that even exceeds many well-known companies like NVIDIA, Palantir, and Coinbase. What exactly is the reason behind MicroStrategy's stunning stock performance? Some believe it's due to the founder Michael J. Saylor's operation mode of a "infinite funding plugin" that successfully pushed up the stock price; others criticize it as similar to a Ponzi scheme and worry it might trigger the next cryptocurrency market crash.
MicroStrategy's current Bitcoin investment returns far exceed its traditional business income. Although its software business revenue has basically not grown in the past few years and has even declined, MicroStrategy has achieved overall profit growth by continuously issuing bonds and diluting equity to raise funds for purchasing more Bitcoin. MicroStrategy has deeply tied its stock to Bitcoin, an operation that has benefits but also brings certain risks to the company, as its core business cannot generate significant profits, and all prospects are pinned on Bitcoin's price increase. In fact, no one knows whether Bitcoin's future price will achieve a steady rise through more financial derivatives + ETFs + strategic reserves, or welcome a wave of "large liquidation".
The company has further enhanced its financing capability by issuing interest-free convertible notes. These notes allow investors to convert them into company equity in the future, but the conversion price is far higher than the current stock price. On the surface, this seems like an unfavorable transaction for investors, but in reality, note holders enjoy priority liquidation rights, which can reduce risks. Meanwhile, MicroStrategy can continue to hoard Bitcoin through this financing method, driving the dual rise of its stock and Bitcoin prices.
The clever point of this strategy is that it successfully transfers risk from the company itself to the stock market by issuing convertible bonds, then using the money to buy Bitcoin. When the debt matures, if the company's stock price is high enough, creditors will choose to convert the debt into stocks instead of demanding repayment, thus completely transferring the debt issue to the stock market. Therefore, the long and short odds of the stock market are generally greater than those of the crypto market.
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