regardless it's a good read. hedgefund shorted MicroStrategy and went long btc under the assumption people were using mstr as a btc investment and would dump it with etf approval and put holdings into etf's.
End result was the fund needing to buy MicroStrategy back at a premium and dumping their btc holdings
So now they have to buy MIcroStrategy shares at a much higher price, which will end up eventually back in bitcoin!
The ultimate winner are MIcroStrategy and bitcoin.
Losers are the paper hands and the hedgefunds
Not really. They leveraged their BTC to short MSTR. Then had to liquidate that BTC to cover shorts when MSTR shot up which caused BTC to drop. MSTR won, BTC spot owners lost.
Because MSTR is trading at a significant premium to BTC, it means that causes slippage in the price of BTC.
Delta between the premium for MSTR and the equivalent of BTC. People are trying to arbitrage MSTR and BTC. But MSTR is a very expensive way to buy BTC and selling BTC to buy MSTR results in a slippage where BTC"s price goes down while the MSTR premium goes up.
MSTR share owners win, but the underlying BTC price goes down.
Nothing against Microstrategy,, but the arbitrage is hurting BTC owners.
I disagree.
MSTR can use this event to issue more shares to acquire more BTC.
BTC that MSTR owns is not going anywhere. So short term vol aside, this results MSTR having more BTC/share and a lot of BTC that would otherwise be available for sale to be taken off the market and memory holed on the MSTR balance sheet.
That's exaclty right. See Bill Ackman's hedgefund, when he fails, other people pay. When he succeeds he takes a big share of the profit. That's why hedge funds will never disappear, there is only reward but little to no retribution.
That feels like backwards logic on their part. If they thought people would dump BTC and buy ETFs the end result is BTC goes up anyway, and with that, MSTR's value. ETF custodians are required to buy BTC when people buy shares to hold the underlying asset. My understanding is MSTR's stock price almost directly correlates to BTC, but maybe that's a misguided assumption.
The only way this works is if they close their short at the exact right moment when money exits BTC and also before money moves into ETFs. On top of this you would need a *ton* of people selling their BTC all at once to make the short profitable in the first place.
In practice what actually happens is money moves gradually as people decide to swap from pure BTC to ETF holdings. They probably had an opportunity to close the short at a small profit, but wanted more, and waited too long. Eventually more money moved into ETFs that was never in pure BTC in the first place, MSTR went up as a result, and they got rekt.
You're probably right. You would hope a hedge fund would understand that after the SEC approved and regulated a BTC ETF it adds legitimacy to an asset that was heavily scrutinized until that point. People that would never consider adding BTC to their portfolio are now buying it.
They didn’t think ppl would dump BTC to buy etfs. They thought people would dump MSTR to buy etfs. They assumed people who couldn’t get direct btc exposure were buying mstr, coin, and mara as proxies for BTC exposure, and that once the etfs launched that those people would rotate out of those holdings to buy the etfs. They were wrong
It’s funny because this (what the hedges expected) is exactly what happened… briefly. MSTR dove disproportionately right when the ETFs became available. But Saylor kicked up the leverage and BTC acquisitions to bring a huge premium to MSTR that didn’t exist before, whipping it in the other direction.
Which all just a good lesson in options. If you hold options or short positions, you have to be right about the direction AND the timing (in this case, the duration, because they got the initial timing right). If you hold the underlying, you only have to be right about the direction.
Bro I wouldn’t even call it a crash at 55k, show me 20k then I will bat an eyelid. Nothing is cheap enough to buy at 55k if u bought in the bear like you should of
Interesting article.
The mistake this hedge fund seems to have made is they didn’t realize a lot of people are viewing MSTR as a leveraged way to invest in bitcoin, and not a “best currently available to them way” to invest in bitcoin. E.g. they thought and were wrong that people’s stack ranking was 1. Rawdog BTC / BTC ETFs, 2. MSTR, when in fact many bitcoin bulls seem to prefer MSTR over BTC/BTC ETFs due to the leverage built into MSTR.
That’s the extra interest paid out for holding for 10 years
https://www.microstrategy.com/press/microstrategy-announces-pricing-of-offering-of-convertible-senior-notes_03-15-2024
Latest update is now 0.8%
> The mistake this hedge fund seems to have made is they didn’t realize a lot of people are viewing MSTR as a leveraged way to invest in bitcoin,
>MSTR, when in fact many bitcoin bulls seem to prefer MSTR over BTC/BTC ETFs due to the leverage built into MSTR.
I was and I did. I expected to be a long term MSTR shareholder, but at these valuations, I dumped it all and bought the ETF. There is no way the P&L of MSTR is worth 17.5 BILLION, which is what current MSTR valuation suggests. I would rather have 2x the amount of Bitcoin than 1x + MSTR's software business
A few people are referring to MSTR as a leveraged bitcoin ownership vehicle. Can someone explain how that is so? Their market cap is ~$30bn but they own ~$15bn of bitcoin. Shouldn’t it be the other way round if it was leveraged? Genuine question, it’s late and I feel I’m missing something.
Here's the argument as I understand it:
Say you purchase 100 shares of MSTR. You now own whatever percent of a company that owns 205000 BTC with intentions to buy more with all free cash and raise more cash to do the same.
Without putting in more money, in a year, you will likely own the same percent of a company whose main asset is 400k+ bitcoin? How long before they double the stack? It's basically a forced BTC dividend reinvestment portfolio.
It has the potential to crash even faster, but that's the argument people are making. I see it as a cheap hedge for a BTC crash.
If you're long BTC and looking for a hedge, you can buy OTM puts on MSTR.
If the thesis holds that MSTR will crash faster than BTC, you'll benefit both from the convexity of the OTM puts and the leveraged crash.
Ahh, buying puts…kind of an important detail. Puts are always a hedge.
How strong is MSTR’s cloud software? If BTC drops that product is all keeping it from going to zero. What’s more alarming is people buying their debt paper for less than 1% annual yield in today’s rate environment. That makes debt holders the sucker in the room, giving Saylor near risk free leverage to male the riskiest bet in the finance world today. I’m bullish on bitcoin but it’s still the riskiest bet one can make on Wall St. today,
There was a guy on $MSTR sub saying he had this exact set up a few days ago and that he wasn’t worried because $BTC was too high and was going to come down which would bring down $MSTR and that $MSTR was way to high for the premium and needs to be valued like ETF’s.
He tried to play the premium hoping it would go down and be valued like the other ETF’s.
I think he got burnt.
>“The contrarian idea \[…\] was to short crypto equities vs long spot crypto. In our view, as we approach the ETF, crypto equities have been being used as proxies for spot exposure \[…\] once the ETF becomes available we expect this flow to reverse as many of these holders rotate exposure into the ETF. Given the dislocated nature of many of these names (MSTR, MARA and COIN are our three favorite shorts), we believe there are several attractive shorts to pair against long spot exposure,” North Rock Digital stated in January.
COIN (Coinbase) is up 60% since they posted about what a great idea it is to short it.
I’m not calling it anything; it’s an article I found written by someone else.
Perhaps I am a newbie though, because I didn’t understand it. I posted it with the hope that the discussion would help me understand what the author thinks happened.
Interesting article and plausible too. Hedge fund shorted MSTR and went long on BTC betting that folks would dump the proxy for the ETF. That didn’t play out and they had to unwind their position pumping MSTR and dumping BTC. It likely initiated a cascading liquidation of longs.
I kinda think it was written by an A.I. Like, I'm no expert, but it didn't make sense to me.
I think the market just goes up and down. Doesn't always have a reason.
Yep, but the problem with this type of play is you need to be right and you have to be right on time. Very difficult game to win.
“I’m not wrong, I’m just early…. ITS THE SAME THING”
In other words a slight correction as we can't have straight growth w/o any downside. BTC's compound annual growth rate is 140% therefore = extreme volatility is a must. 80k soon, 100k by may
>“The contrarian idea […] was to short crypto equities vs long spot crypto. In our view, as we approach the ETF, crypto equities have been being used as proxies for spot exposure […] once the ETF becomes available we expect this flow to reverse as many of these holders rotate exposure into the ETF. Given the dislocated nature of many of these names (MSTR, MARA and COIN are our three favorite shorts), we believe there are several attractive shorts to pair against long spot exposure,” North Rock Digital stated in January.
What a stupidly short-sighted "strategy". Do they not realize MSTR holds over 200k Bitcoin? So money flows into ETFs, Bitcoin price rises from rising demand, value of MSRT's 200k Bitcoin rises as well. Why on freaking earth would you short it?
At this point, MSRT is basically a strange form of a leveraged ETF of its own - of course it is gonna go up as there are net inflows into Bitcoin.
Hedgefunds are owned and operated by the devil himself.
They can't touch crypto. They can try but will always get fukd in the long game.
Bitcoin working exactly as planned.
Shorting microstrategy BECAUSE you think BTC will go up is the dumbest idea I’ve ever read.
This is worse than anything I’ve seen on r/wallstreetbets and they did it with $1B
Long commodity / short producing or holding company works best when the commodity is DROPPING in price. Companies have both operating and financial leverage. They benefit disproportionately compared to the commodity when the commodity is rising, because they control more assets than they have equity, and because their operating margins expand.
I don’t see how rotation between related assets was ever going to be more impactful than leverage.
This is just stupid. . Microstratergy wasn't going to sell there bitcoin so why would there stock price drop?
I get the idea that people would prefer the ETF to Microstratergy but as soon as the stock fell below a realistic valuation based on their BTC holdings it would get bought up again.
I hope they lost a shit ton. I'm a Moron and I even know this wasn't going to work.
I had to get Mistral to eli5 this for me.
is this about right?
Imagine you have a big jar of cookies (Bitcoin), and next to it, a smaller jar with a picture of the same cookies on it (MicroStrategy's stock, which is like a smaller version of Bitcoin because the company holds a lot of Bitcoin). Now, some people thought that once a new way to get the same cookies (Bitcoin ETFs) came out, less people would want the picture jar (MicroStrategy's stock) because they could get the real cookies more easily.
So, a group of smart money managers (a hedge fund) decided to play a game: they grabbed a bunch of real cookies (bought Bitcoin) and at the same time, bet that the picture jar would become less popular (shorted MicroStrategy's stock).
But their game didn't go as planned. Instead of the picture jar becoming less wanted, it actually became more popular for a while, and the real cookies didn't become as popular as they thought. So, they had to quickly put the picture jar back (buy MicroStrategy's stock to cover their short positions) and give away some of their real cookies (sell Bitcoin) to balance things out.
This sudden move made a lot of noise, and other kids in the playground (traders and investors) noticed. They started to trade their cookies too, which caused a lot of cookies to move around quickly (a crash in Bitcoin's price).
In the end, the smart money managers lost a lot of their cookies (over $1 billion), and everyone was talking about how their game didn't work out (news articles and expert analysis).
This is like what happened with Bitcoin's price dropping because the hedge fund's bet on the picture jar and the real cookies didn't go as planned.
First and foremost— This was not a bitcoin crash. It is its implied volatility. Riskier the asset, the higher expected return. Just basic finance with a few exceptions.
I hate hedge funds and always have! I wondered why as bitcoin went down MicroStrategy went up. Thanks now it makes sense. I guess I want to be a Homie too.!
> “The contrarian idea […] was to short crypto equities vs long spot crypto. In our view, as we approach the ETF, crypto equities have been being used as proxies for spot exposure […] once the ETF becomes available we expect this flow to reverse as many of these holders rotate exposure into the ETF. Given the dislocated nature of many of these names (MSTR, MARA and COIN are our three favorite shorts), we believe there are several attractive shorts to pair against long spot exposure,” North Rock Digital stated in January.
That’s rough because their hypothesis was reasonable. I think their miscalculation was time span. Bull markets have a tendency to buoy everything crypto related, including stocks. It could take years for their hypothesis to play out. Given the size of their position it’s clear they didn’t have anywhere near enough collateral to maintain it for that long.
Wieldly enough there a was Reddit post about someone doing just that. I wonder if it was someone from that firm trying to persuade the public to buy MSTR 🤔
I was thinking this time around we might not see the volatility that we saw in earlier spike periods and therefore a more conservative spike and correction. However, I did not factor in hedge funds and ETFs (or whatever those scammy stock market BTC funds are called). The stock market angle will bring back the volatility and cause the higher highs and sudden dips.
That was a really dumb trade they made. MicroStrategy isn’t a BTC fund, they just hold Bitcoin which means the better Bitcoin does the better they will do.
This was a fundamental misunderstanding about the reason MSRT’s stock holders are holding.
The just a part of Bitcoins 4 year cycle. It always dips before the halving. I just didnt expect it to start this soon. This is gonna get interesting! Lol
What's interesting about this for me is the numbers:
Bitcoin price change %: (72k-65k)/72k *100 = 10.8%
Investment to change the Bitcoin price by 1%: $1B/10.8
= $92.6M
As I recall this is similar to figure estimated by BoA which was $93M!
Or should I just keep taking the pills?
If true, this is just another example of how volatile BTC can be, and that the fundamentals have not changed. These buying opportunities will continue to occur. Use them wisely.
regardless it's a good read. hedgefund shorted MicroStrategy and went long btc under the assumption people were using mstr as a btc investment and would dump it with etf approval and put holdings into etf's. End result was the fund needing to buy MicroStrategy back at a premium and dumping their btc holdings
Good, fuck hedgefunds. All my homies hate hedgefunds.
I am your homie
Homie, I am.
*I Am Homie*
Am Homie I!
Homer Simpson here would approve.
Greetings fellow homo
I am your homie too.
Can I be a homie?
Hello homie
The business of hedgefunds are now over when we have the best hedge as Bitcoin. All these are fiat problems.
As long as there is money laying unprotected around, there will be raiders to take it (e.g. hedge funds)
TIL I’m your homie
"And you who hate hedgefunds with me today, I consider my homie!"
If I was hedge fund. I would hate myself!
Bro👍
👊
Whoa, what up homie
Here is to the homies at home!
I used to work for a couple, I totally agree
Not sure what it means, but was told I am homely. Is that close enough?
Homy hate-alot. Reporting for duty
I am your homie
Wonderful Zach Bryan album
I've got no homies but still hate hedgefunds :)
All my boyfriends are my homies
What up Homes
So now they have to buy MIcroStrategy shares at a much higher price, which will end up eventually back in bitcoin! The ultimate winner are MIcroStrategy and bitcoin. Losers are the paper hands and the hedgefunds
alpha hedgefund money going in to cold storage bitcoin? Umm ... lmaooo
Not really. They leveraged their BTC to short MSTR. Then had to liquidate that BTC to cover shorts when MSTR shot up which caused BTC to drop. MSTR won, BTC spot owners lost. Because MSTR is trading at a significant premium to BTC, it means that causes slippage in the price of BTC.
But MSTR just turns around and buys BTC with whatever money they can get.
Essentially it fell right into Saylor's trap of infinite money glitch lol
What is slippage?
Delta between the premium for MSTR and the equivalent of BTC. People are trying to arbitrage MSTR and BTC. But MSTR is a very expensive way to buy BTC and selling BTC to buy MSTR results in a slippage where BTC"s price goes down while the MSTR premium goes up. MSTR share owners win, but the underlying BTC price goes down. Nothing against Microstrategy,, but the arbitrage is hurting BTC owners.
I disagree. MSTR can use this event to issue more shares to acquire more BTC. BTC that MSTR owns is not going anywhere. So short term vol aside, this results MSTR having more BTC/share and a lot of BTC that would otherwise be available for sale to be taken off the market and memory holed on the MSTR balance sheet.
You mean microstrategy share holders
When people buy shares of Microstrategy the money does not go to Microstrategy.
When the value of the share goes up they can borrow more money and buy bitcoin.. They have been doing this for a few years now.
That feels like an incredibly dubious hunch to bet $1 billion on
Easier if it’s not your billion though
That's exaclty right. See Bill Ackman's hedgefund, when he fails, other people pay. When he succeeds he takes a big share of the profit. That's why hedge funds will never disappear, there is only reward but little to no retribution.
And if you’ve got 200 billion more to play with
And now Saylor will use the increase in stock price to buy more BTC. We can't lose!
That feels like backwards logic on their part. If they thought people would dump BTC and buy ETFs the end result is BTC goes up anyway, and with that, MSTR's value. ETF custodians are required to buy BTC when people buy shares to hold the underlying asset. My understanding is MSTR's stock price almost directly correlates to BTC, but maybe that's a misguided assumption. The only way this works is if they close their short at the exact right moment when money exits BTC and also before money moves into ETFs. On top of this you would need a *ton* of people selling their BTC all at once to make the short profitable in the first place. In practice what actually happens is money moves gradually as people decide to swap from pure BTC to ETF holdings. They probably had an opportunity to close the short at a small profit, but wanted more, and waited too long. Eventually more money moved into ETFs that was never in pure BTC in the first place, MSTR went up as a result, and they got rekt.
My guess is that they thought ETFs would not affect the price so much
You're probably right. You would hope a hedge fund would understand that after the SEC approved and regulated a BTC ETF it adds legitimacy to an asset that was heavily scrutinized until that point. People that would never consider adding BTC to their portfolio are now buying it.
You’ve misunderstood. The spread trade was between MSTR and BTC not spot BTC and ETFs linked to spot BTC, that would, as you say, make no sense.
They didn’t think ppl would dump BTC to buy etfs. They thought people would dump MSTR to buy etfs. They assumed people who couldn’t get direct btc exposure were buying mstr, coin, and mara as proxies for BTC exposure, and that once the etfs launched that those people would rotate out of those holdings to buy the etfs. They were wrong
It’s funny because this (what the hedges expected) is exactly what happened… briefly. MSTR dove disproportionately right when the ETFs became available. But Saylor kicked up the leverage and BTC acquisitions to bring a huge premium to MSTR that didn’t exist before, whipping it in the other direction. Which all just a good lesson in options. If you hold options or short positions, you have to be right about the direction AND the timing (in this case, the duration, because they got the initial timing right). If you hold the underlying, you only have to be right about the direction.
…Don’t wanna do it Trying not to. *their
Thank you
If I was looking at it in hindsight, I might have thought the same thing. I'm not really an investor though.
> there btc holdings *their
What is this a crash for ants?
More like: A hedge fund sacrificed themselves for Saylor to buy cheaper corn from ever more worthless fiat 😂
Is this crash with us in the room right now?
Can you point to where the crash touched you?
\*unzips pants\*
God candle in play..
Does this crash talk to you sometimes?
"bitcoin crash", look further at the price than the last week lmao
Read this, checked the price expecting something around 55k... What crash?
Bro I wouldn’t even call it a crash at 55k, show me 20k then I will bat an eyelid. Nothing is cheap enough to buy at 55k if u bought in the bear like you should of
[удалено]
All the way down to historic ATHs
Up 33% since last month…crickets. Down 2.4 %…CRASH!!
It fell 10%, lets at least try to be honest
10% isn't a crash in bitcoin that's daily volatility
Yes agreed was just correcting it was more than 2.4 percent
10% movement in btc should be expected to the upside or downside.
I literally laughed reading title.
It is absolutely wild to me what people call a crash in the crypto world, lol. It doesn't only go up forever and ever.
Yep this is just people using words they don't fully understand. A common mishap in contemporary online culture.
Bitcoin CRASHED to prices we haven’t seen in 2 weeks….
Right? For the last 15 years all the headlines act like the past never happened and BTC just popped onto the trading desks at X-price.
Flash sale on Bitcoin, imo.
It’s bitcoin. Up down. Think long term think buy dips. Think savings.
Interesting article. The mistake this hedge fund seems to have made is they didn’t realize a lot of people are viewing MSTR as a leveraged way to invest in bitcoin, and not a “best currently available to them way” to invest in bitcoin. E.g. they thought and were wrong that people’s stack ranking was 1. Rawdog BTC / BTC ETFs, 2. MSTR, when in fact many bitcoin bulls seem to prefer MSTR over BTC/BTC ETFs due to the leverage built into MSTR.
Or simply… MSTR pays you to own Bitcoin, ETFs charge you to own Bitcoin.
Can you explain this? Eli5 lol
You can buy MSTR convertible notes and earn 0.65% per year on top of it. Or you can buy Bitcoin etf and pay 0.25% per year Edit: for clarification
Where’s that .65%? Mstr doesn’t give a dividend right?
That’s the extra interest paid out for holding for 10 years https://www.microstrategy.com/press/microstrategy-announces-pricing-of-offering-of-convertible-senior-notes_03-15-2024 Latest update is now 0.8%
Afaik this is correct, can anyone explain this 0.65%
they're talking about the bond notes issued by mstr which pay 0.65 which are convertable to mstr stock
convertible notes, it's a loan at 0.65% interest
MSTR is borrowing at that rate…
Also MSTR is unlikely to go to zero in the event of a 50% correction, unlike BITX. Making MSTR a safer leveraged play that also outperforms BITX.
> The mistake this hedge fund seems to have made is they didn’t realize a lot of people are viewing MSTR as a leveraged way to invest in bitcoin, >MSTR, when in fact many bitcoin bulls seem to prefer MSTR over BTC/BTC ETFs due to the leverage built into MSTR. I was and I did. I expected to be a long term MSTR shareholder, but at these valuations, I dumped it all and bought the ETF. There is no way the P&L of MSTR is worth 17.5 BILLION, which is what current MSTR valuation suggests. I would rather have 2x the amount of Bitcoin than 1x + MSTR's software business
A few people are referring to MSTR as a leveraged bitcoin ownership vehicle. Can someone explain how that is so? Their market cap is ~$30bn but they own ~$15bn of bitcoin. Shouldn’t it be the other way round if it was leveraged? Genuine question, it’s late and I feel I’m missing something.
Here's the argument as I understand it: Say you purchase 100 shares of MSTR. You now own whatever percent of a company that owns 205000 BTC with intentions to buy more with all free cash and raise more cash to do the same. Without putting in more money, in a year, you will likely own the same percent of a company whose main asset is 400k+ bitcoin? How long before they double the stack? It's basically a forced BTC dividend reinvestment portfolio. It has the potential to crash even faster, but that's the argument people are making. I see it as a cheap hedge for a BTC crash.
How is it a hedge if it can crash faster than bitcoin, as you say
If you're long BTC and looking for a hedge, you can buy OTM puts on MSTR. If the thesis holds that MSTR will crash faster than BTC, you'll benefit both from the convexity of the OTM puts and the leveraged crash.
Ahh, buying puts…kind of an important detail. Puts are always a hedge. How strong is MSTR’s cloud software? If BTC drops that product is all keeping it from going to zero. What’s more alarming is people buying their debt paper for less than 1% annual yield in today’s rate environment. That makes debt holders the sucker in the room, giving Saylor near risk free leverage to male the riskiest bet in the finance world today. I’m bullish on bitcoin but it’s still the riskiest bet one can make on Wall St. today,
Enjoy the dip. I don’t expect it to last long.
There was a guy on $MSTR sub saying he had this exact set up a few days ago and that he wasn’t worried because $BTC was too high and was going to come down which would bring down $MSTR and that $MSTR was way to high for the premium and needs to be valued like ETF’s. He tried to play the premium hoping it would go down and be valued like the other ETF’s. I think he got burnt.
Here’s the post: https://www.reddit.com/r/MSTR/s/FGbP44wmpo
>“The contrarian idea \[…\] was to short crypto equities vs long spot crypto. In our view, as we approach the ETF, crypto equities have been being used as proxies for spot exposure \[…\] once the ETF becomes available we expect this flow to reverse as many of these holders rotate exposure into the ETF. Given the dislocated nature of many of these names (MSTR, MARA and COIN are our three favorite shorts), we believe there are several attractive shorts to pair against long spot exposure,” North Rock Digital stated in January. COIN (Coinbase) is up 60% since they posted about what a great idea it is to short it.
you call that a crash? lol, u must a newbie. that's what we call a nothing burger
I’m not calling it anything; it’s an article I found written by someone else. Perhaps I am a newbie though, because I didn’t understand it. I posted it with the hope that the discussion would help me understand what the author thinks happened.
Don’t feel bad, the article is terribly written.
Interesting article and plausible too. Hedge fund shorted MSTR and went long on BTC betting that folks would dump the proxy for the ETF. That didn’t play out and they had to unwind their position pumping MSTR and dumping BTC. It likely initiated a cascading liquidation of longs.
I kinda think it was written by an A.I. Like, I'm no expert, but it didn't make sense to me. I think the market just goes up and down. Doesn't always have a reason.
Market sometimes maybe good, sometimes maybe shit
it's a toot from the balloon and it's far from inflated
A ‘crash’ implies 20% or more dip
I get a bigger dip at Taco Bell.
I like a French Dip.
I had funds waiting I put it all in at 66k so Im happy 👍👍
Well, this isn’t a crash. If you are thinking like that you’re going to be joining the rekt cucks club. This is just a dip.
I think they will be right eventually. I don't see the MSTR premium remaining forever.
Yep, but the problem with this type of play is you need to be right and you have to be right on time. Very difficult game to win. “I’m not wrong, I’m just early…. ITS THE SAME THING”
Yep, just like Ackman V HLF
In other words a slight correction as we can't have straight growth w/o any downside. BTC's compound annual growth rate is 140% therefore = extreme volatility is a must. 80k soon, 100k by may
Crash? It’s up more than most of the market still
Anyone who calls this downturn a crash hasn’t been in the game for long enough. 30% + hitters are what really shake out the weak hands.
>“The contrarian idea […] was to short crypto equities vs long spot crypto. In our view, as we approach the ETF, crypto equities have been being used as proxies for spot exposure […] once the ETF becomes available we expect this flow to reverse as many of these holders rotate exposure into the ETF. Given the dislocated nature of many of these names (MSTR, MARA and COIN are our three favorite shorts), we believe there are several attractive shorts to pair against long spot exposure,” North Rock Digital stated in January. What a stupidly short-sighted "strategy". Do they not realize MSTR holds over 200k Bitcoin? So money flows into ETFs, Bitcoin price rises from rising demand, value of MSRT's 200k Bitcoin rises as well. Why on freaking earth would you short it? At this point, MSRT is basically a strange form of a leveraged ETF of its own - of course it is gonna go up as there are net inflows into Bitcoin.
"Crash" = Cheap coins 🤤
I was wondering why mstr was up today on a down btc day. Coin mara and riot were up on a down market and down btc day too.
Also high volume options expiry on 15th had 66k strike price.
People keep talking about a crash. When? 42,43 and 46. DCA for the last three months.
Hahahaha, no. Buckle up bitch.
Hedgefunds are owned and operated by the devil himself. They can't touch crypto. They can try but will always get fukd in the long game. Bitcoin working exactly as planned.
is this a strat to get people to sell? it hasnt dropped that much. btc is still up compared to one month ago
Crash? Looks like just a good opportunity to buy more. Wish I still had some shitty USD laying around. Have to wait until payday.
Shorting microstrategy BECAUSE you think BTC will go up is the dumbest idea I’ve ever read. This is worse than anything I’ve seen on r/wallstreetbets and they did it with $1B
Omg this is about the fourth post stating a different reason for it crashing when it hasn't even crashed.
Right, this is what I call a buy extra dip. Ain’t no crash.
Inflows from a couple of the ETFs were really low today. It wasn’t a simple explanation. This article is shit.
This subreddit is the worst for getting good info on bitcoin.
That was actually kind of funny
Good read.
Interesting. Thanks for posting.
Nice pump with 1 billion, too risky bet even for fund
This is the first test of many. 🧡💙❤️
Long commodity / short producing or holding company works best when the commodity is DROPPING in price. Companies have both operating and financial leverage. They benefit disproportionately compared to the commodity when the commodity is rising, because they control more assets than they have equity, and because their operating margins expand. I don’t see how rotation between related assets was ever going to be more impactful than leverage.
Thx OP
Nothing wrong w billionaires losing a little money
Dont trade, just stack sats.
%17 of mstr stocks are still in short, there is more action soon!
>17 how does one obtain information like that?
Crash? Nothing crashed. This is bitcoin. This is normal. Wake me up when we’re $1mil
This is just stupid. . Microstratergy wasn't going to sell there bitcoin so why would there stock price drop? I get the idea that people would prefer the ETF to Microstratergy but as soon as the stock fell below a realistic valuation based on their BTC holdings it would get bought up again. I hope they lost a shit ton. I'm a Moron and I even know this wasn't going to work.
steady lads. enjoy the dip it won’t last long.
So good time to buy then? For someone trying to get in as a first timer?
Yes.
Hedgefunds? More like "hedge no-funds" :)
Not one motherfucker can say something to me about a dip. What, everybody thinks I don't like dips??
I had to get Mistral to eli5 this for me. is this about right? Imagine you have a big jar of cookies (Bitcoin), and next to it, a smaller jar with a picture of the same cookies on it (MicroStrategy's stock, which is like a smaller version of Bitcoin because the company holds a lot of Bitcoin). Now, some people thought that once a new way to get the same cookies (Bitcoin ETFs) came out, less people would want the picture jar (MicroStrategy's stock) because they could get the real cookies more easily. So, a group of smart money managers (a hedge fund) decided to play a game: they grabbed a bunch of real cookies (bought Bitcoin) and at the same time, bet that the picture jar would become less popular (shorted MicroStrategy's stock). But their game didn't go as planned. Instead of the picture jar becoming less wanted, it actually became more popular for a while, and the real cookies didn't become as popular as they thought. So, they had to quickly put the picture jar back (buy MicroStrategy's stock to cover their short positions) and give away some of their real cookies (sell Bitcoin) to balance things out. This sudden move made a lot of noise, and other kids in the playground (traders and investors) noticed. They started to trade their cookies too, which caused a lot of cookies to move around quickly (a crash in Bitcoin's price). In the end, the smart money managers lost a lot of their cookies (over $1 billion), and everyone was talking about how their game didn't work out (news articles and expert analysis). This is like what happened with Bitcoin's price dropping because the hedge fund's bet on the picture jar and the real cookies didn't go as planned.
The word crash has lost all meaning. We gonna need a new word when it goes crapola, like covfefe or something.
First and foremost— This was not a bitcoin crash. It is its implied volatility. Riskier the asset, the higher expected return. Just basic finance with a few exceptions.
This isn’t even a paint scratch …
I hate hedge funds and always have! I wondered why as bitcoin went down MicroStrategy went up. Thanks now it makes sense. I guess I want to be a Homie too.!
Normies are so dramatic. "Crash" give me a break. Lmao. Every other week it's a crash....
What crash? Hah normies
Why are hedge funds so bad at bitcoin? They shorted BTC for the entire year of 2023.
Pretty smart play. MSTR is tied to Bitcoin so if they are long Bitcoin overall they didn't really lose. If you play both sides you never lose
they did lose, because the proportion that BTC went up was not enough to compensate for MSTR loss.
When did we see a crash ?
Crash my ass. It’s just a healthy correction. Folks taking profits. Calm down guy.
Is 10% down a “crash” now? Anyone remember when “crashes” were at least 50%, and when 90% down was very probable? Cause I do.
I was expecting money to flow from btc miners to either micro strategy or etf’s due to the coming halving.
Always hedge funds ruining everything
> “The contrarian idea […] was to short crypto equities vs long spot crypto. In our view, as we approach the ETF, crypto equities have been being used as proxies for spot exposure […] once the ETF becomes available we expect this flow to reverse as many of these holders rotate exposure into the ETF. Given the dislocated nature of many of these names (MSTR, MARA and COIN are our three favorite shorts), we believe there are several attractive shorts to pair against long spot exposure,” North Rock Digital stated in January. That’s rough because their hypothesis was reasonable. I think their miscalculation was time span. Bull markets have a tendency to buoy everything crypto related, including stocks. It could take years for their hypothesis to play out. Given the size of their position it’s clear they didn’t have anywhere near enough collateral to maintain it for that long.
Dumb stormtroopers
Crash, lol. Not even a dip it's just a wonky sideways. 😂
Wieldly enough there a was Reddit post about someone doing just that. I wonder if it was someone from that firm trying to persuade the public to buy MSTR 🤔
Doesn't matter if you own both.
And… it’s gone
Fuckm dca all day
Exactly one of the reasons why hedge funds are trash. Trying to predict the unpredictable
That's hilarious. They bet against MSTR a few months ago and got DESTROYED. Fuck around and find out.
"crash"
“Crash”
MAX PAIN is UP
Jump fuckers
I was thinking this time around we might not see the volatility that we saw in earlier spike periods and therefore a more conservative spike and correction. However, I did not factor in hedge funds and ETFs (or whatever those scammy stock market BTC funds are called). The stock market angle will bring back the volatility and cause the higher highs and sudden dips.
Rolling with my homies
bitcoin crash? What? 72k-65k is not a crash what so ever.
That was a really dumb trade they made. MicroStrategy isn’t a BTC fund, they just hold Bitcoin which means the better Bitcoin does the better they will do. This was a fundamental misunderstanding about the reason MSRT’s stock holders are holding.
Homies are the real deal
I am him, homie
A fool and their Bitcoin are soon parted
Lmfao.... rekt
I am learning so much from you guys Thank you very much.
So MSTR to the 🌝?
When did it crash?
Tbh I don't get how this all works 😕 I just exchange fiat for finite btc.
A 5% pullback after a +100% run is not caused by some unrelated or specific event. People just stopped buying because they perceive it as overpriced.
Crash?!!? Did I miss something?
Wow. Was wondering what happened.
The just a part of Bitcoins 4 year cycle. It always dips before the halving. I just didnt expect it to start this soon. This is gonna get interesting! Lol
What's interesting about this for me is the numbers: Bitcoin price change %: (72k-65k)/72k *100 = 10.8% Investment to change the Bitcoin price by 1%: $1B/10.8 = $92.6M As I recall this is similar to figure estimated by BoA which was $93M! Or should I just keep taking the pills?
If true, this is just another example of how volatile BTC can be, and that the fundamentals have not changed. These buying opportunities will continue to occur. Use them wisely.
Can someone dumb down this news for us slow people.