Bitcoin is heading towards $100,000, but the crypto trading groups are surprisingly quiet. After Trump's election, everyone was expecting a surge of 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 been a BTC index in the US stock market since the last cycle. However, in September this year, MSTR once again attracted market attention. This time, it was because MSTR actually started to move before the rise in Bitcoin price, and maintained a persistent premium over Bitcoin in the subsequent market.
BlockBeats notes that the Net Asset Value (NAV) premium is highly correlated with MicroStrategy's stock issuance activities, and the premium tends to rise shortly after MSTR's issuance. According to MSTR Tracker, the current NAV premium is around 3.3.
Many people have started discussing why MSTR has a premium. In fact, MicroStrategy has quietly started a new Bitcoin acquisition strategy since the middle and late last year, called "premium issuance".
Related reading: "The 'debt-financed Bitcoin purchase' strategy hasn't changed, so why has MSTR's premium suddenly soared?"
In simple terms, MicroStrategy has previously been raising funds to buy BTC through debt issuance, which means that each MSTR share represents a certain amount of BTC (which is why it is seen as a BTC index in the US stock market). However, the "premium issuance" model is much more straightforward and immediate: when 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 the cycle continues, 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 holds 5% of the total circulating supply, 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 the "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.
In other words, if Saylor's vision continues to become a reality, more and more US companies will adopt the "premium issuance" Bitcoin treasury model, and Bitcoin prices will be further tied to the US stock market. And this massive liquidity will be entirely absorbed by BTC as an 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 away from Crypto. In this context, the bull market will have only two betas: one is Bitcoin, and the other is Solana, which can absorb the liquidity within the circle.
