Due to the bitcoin yield. MSTR gave a 74% bitcoin yield on 2024 and a 14% this year so far. If I bought 1 bitcoin or 1 bitcoin through an ETF a year ago now I have 1 bitcoin and in a year I'll have 1 bitcoin
I was talking about buying ETFs in a leveraged manner in that sentence, i.e. via call options.
Comparing leverage on ETF to be able to borrow billions of dollars at 0% with no margin call is like comparing an elephant to a mosquito.
What is exactly the advantage for the investor? These billions are only invested in BTC.
So what if the supply is predictable. What MSTR has demonstrated with facts is that it has created products that no one could even imagine a few years ago and that it has a growing demand for them, such as bitcoin bonds, which are the most profitable in the entire bond market. To think that demand is going to remain fixed when it has not stopped increasing is an unjustified assumption. And the fact that bitcoin has a predictable supply has nothing to do with it,
Maybe I expressed my point in a wrong way. I was comparing the market entry of 21 Capital, a "supplier increase" in the "bitcoin bond" market, and its influence on MSTR and the market in comparison to the steady, but diminishing increase of Bitcoin's supply.
I think it's quite a trivial effect I want to describe ... Let's have a simplified example: let's speculate that demand for MSTR-like bonds increases 10% per year, and that 21 Capital achieves an 20% market share (regarding income via bonds) after a year. That means that after a year, MSTR has lost 10% of its income via bonds, in comparison to the starting point of our comparison. Thus, if the competitors itself do not bring additional demand into the market, the original monopolist suffers. I don't know why this simple principle should not be valid for this particular market too.
We can of course speculate that the
demand increase
for these bonds is higher than 10%, and thus both competitors win. But as a monopolist, MSTR could have achieved a higher growth.
The market entry of 21 Capital does not per se increase the demand for Bitcoins, because 21 Capital competes with MSTR's demand, the ETF's/ETP's demand, and even the demand on the BTC spot market (and a lot of informal products like "BTC staking" offered on Bitcoin exchanges). It only increases demand for BTC if it doesn't take market share from these
existing "suppliers" away, i.e. if it is able to convince new investors which wouldn't have invested neither in MSTR, nor in ETFs, nor in BTC directly.
The point about the predictable Bitcoin supply was a bit misleading perhaps, let's just ignore it, it isn't important for my point.