Recently, I suddenly realized something:
The market is not actually pricing MicroStrategy's Bitcoin, but rather pricing its financing ability.
Many people will feel when they see this statement:
Isn't this nonsense?
But I find that most people are actually unaware of the true meaning of this statement.
Because most people only have one indicator in mind when looking at MicroStrategy:
How much BTC it holds.
But this actually only sees the surface.
If MicroStrategy is just a company that solely holds BTC, then it is actually a:
Closed-end BTC fund.
How to value such a company?
Very simple:
BTC asset value ≈ company value
And often it will even be at a discount.
Because the market will think:
You are just a shell holding BTC.
But what is really powerful about MicroStrategy is:
It has the ability to continuously finance from the capital market and then buy BTC.
So if you really understand this company, you will find:
Its real asset is not BTC.
But rather its financing ability.
In other words:
MicroStrategy is actually not BTC
But rather BTC × a leverage
And this leverage is: financing ability.
This is also why during a bull market,
MicroStrategy's mNAV premium can be very exaggerated:
2 times, 3 times, even 5 times
Many people will feel when they see this number:
Too expensive.
But if you understand its structure, you will find:
The market is actually not pricing BTC.
The market is pricing the financing ability.
And the current situation is actually very interesting.
The current mNAV premium of MicroStrategy is only about 10%.
If you only use BTC to price it, you might think:
There is already a premium.
But if you understand that MicroStrategy's real asset is its financing ability, you will find:
This premium is actually very low.
It can even be said,
For MicroStrategy,
This is already close to a 'negative premium'.
So I currently have a very simple strategic idea:
When MicroStrategy premium is below 50%,
Even when it is below 20%,
Converting BTC to MicroStrategy stock is actually reasonable.
Because the market has almost not priced its financing ability.
Conversely,
If during the extreme phase of a bull market,
MicroStrategy premium reaches:
2 times, 3 times, even 5 times
At that time, you could actually consider:
Convert MicroStrategy back to BTC.
So the whole logic is actually very simple:
Bear market
BTC → MicroStrategy
Bull market
MicroStrategy → BTC
I used to have an idea:
Wait for MicroStrategy to have a negative premium,
Then convert BTC back for arbitrage.
But looking back now,
This idea is actually a bit naive.
Because at that time I was still looking at it with a very simple logic:
MicroStrategy = BTC.
But now I increasingly feel that,
The real pricing logic of this company is actually:
BTC × financing ability.
So even though in an extreme bear market,
Theoretically, it could appear at a negative premium,
But this probability is actually very low.
So if I were to summarize MicroStrategy in one sentence:
Its real asset is not Bitcoin.
But rather its ability to convert capital market money into Bitcoin.
And this point,
Many people actually still do not really understand.
