We did it once more!
Pete and I went dwell once more final evening to convey you necessary particulars a few MAJOR transfer that’s about to occur within the crypto area this coming Monday.
There’s nonetheless time so that you can rewatch final evening’s pressing Zoom briefing right here 👇.
The final time we did this bitcoin (BTC) rocketed up almost 10% in just one week.
And I imagine a good greater transfer transfer may occur as quickly as subsequent week…
So I assumed I’d use right this moment’s subject to arrange you for what’s coming.
Let’s begin with MicroStrategy (Nasdaq: MSTR) a business-intelligence software program firm that’s been round for over three many years.
You may need seen MicroStrategy within the information just lately, but it surely’s not for something the corporate is doing within the software program sector.
That’s as a result of MicroStrategy is barely a software program firm anymore.
Bear in mind how massive a deal it was final week when Microsoft shareholders voted on whether or not the corporate can buy bitcoin as an asset class?
Effectively, MicroStrategy has been shopping for bitcoin for almost 5 years.
Again in 2020 MicroStrategy’s then-CEO Michael Saylor made the daring determination to start out buying bitcoin as a possible hedge towards inflation.
And the corporate saved shopping for bitcoin — at the same time as its value fluctuated.
It was a dangerous transfer. However up to now the choice has paid off in spades for MicroStrategy.
As chairman, Saylor has overseen a large surge within the firm’s inventory value over the previous 5 years.
This 12 months alone the corporate’s shares are up as excessive as 521%.
After all, this unbelievable inventory story has nothing to do with the corporate’s software program enterprise.
By one estimate, MicroStrategy’s worth per share of its software program enterprise represents solely 0.3% of the inventory value.
However the firm’s bitcoin enterprise is booming!
It’s so necessary to MicroStrategy’s enterprise that the corporate needed to give you a brand new efficiency indicator.
It’s known as “bitcoin yield.”
And it tracks the share change over time within the ratio of the corporate’s bitcoin holdings to its assumed diluted shares excellent.
However you don’t want to grasp how “bitcoin yield” works to grasp why I urged Pete to affix me for one more dwell briefing final evening.
All it’s essential know is that MicroStrategy now owns greater than 2% of bitcoin’s complete provide…
A provide that’s capped at 21 million cash.
And that brings me to Monday’s massive transfer…
What’s Taking place On Monday?
On December 23, MicroStrategy will enter the Nasdaq-100.
It’s a inventory market index reserved for the most important 100 nonfinancial corporations within the full Nasdaq Composite Index by market capitalization.
And it’s an enormous deal.
You see, MicroStrategy turned eligible to affix the Nasdaq-100 as a result of it’s technically a software program firm.
However as I simply confirmed you, it owes most of its market cap to the corporate’s bitcoin funding technique.
MicroStrategy’s market cap is up from round $1.4 billion on August 11, 2020 when the corporate first purchased bitcoin to round $93.9 billion as of Monday.
That’s a achieve of over 6,600%.
Clearly, one of many predominant components behind this large achieve is bitcoin’s latest surge to over $107,000.
MicroStrategy’s impending Nasdaq-100 Index membership announcement additionally lifted the inventory.
Nevertheless it’s HOW the corporate acquired bitcoin that we must always concentrate on.
As a result of MicroStrategy was capable of make all these bitcoin purchases by leveraging debt.
It bought inventory and different convertible-debt choices to assist finance its bitcoin purchases.
In different phrases, the corporate has created a sort of infinite cash loop.
As its inventory value goes up… it’s capable of purchase extra bitcoin.
As bitcoin’s value goes up… it’s capable of purchase extra bitcoin.
And now that the corporate is becoming a member of the Nasdaq-100 plenty of establishments with ETFs that mirror the Nasdaq-100 will begin shopping for MicroStrategy…
And that can trigger its inventory value to go up.
As its inventory value goes up… it’s capable of purchase extra bitcoin.
Do you see what’s happening right here?
It’s like an infinite cash loop.
Right here’s My Take
MicroStrategy has the largest company portfolio of digital belongings on the earth.
Its explosive progress exhibits how a cryptocurrency-driven company technique can work…
And its entry within the Nasdaq-100 proves that its high-risk bitcoin method can achieve market acceptance.
Like I informed you final week about Microsoft’s vote…
It’s not a matter of if, it’s a matter of when shopping for bitcoin as an asset appeals to a significant company.
Possibly it’s Amazon or Apple. Possibly Microsoft’s shareholders ultimately relent.
However it should occur.
Within the brief time period, I see Microstrategy’s massive transfer to the Nasdaq-100 doing two issues.
One is that it may trigger an enormous spike in bitcoin like we noticed final week.
Second — and extra necessary over the long run — is that it proves that bitcoin is a reliable type of collateral.
We entered 2004 with a brand new bitcoin ETF that confirmed of us it’s OK to put money into bitcoin now.
We’re ending the 12 months by exhibiting of us it’s not simply one thing you may put money into…
However one thing that you would be able to borrow towards.
Both method, I see bitcoin going up and to the precise.
And as we’ve seen earlier than…
When bitcoin goes up smaller cash are inclined to make even greater strikes.
My concern is that if you happen to wait till Monday you may miss out on the 4 altcoins I’ve recognized that would make the largest strikes.
So if you happen to haven’t seen it… ensure to click on on this hyperlink to observe final evening’s pressing Zoom briefing.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing