Currently i see two weakness in 21 Capital:
- Higher entry price in Bitcoin: the market can test the "pain level" of 21 Capital, much quicker and easily than Strategy's one. They will eventually do that. Bear in mind the 85K level.
- Commitment: Saylor said he would never sell any bitcoin and would take his stash to his grave. 21 Capital is a sum of different players; hence, agendas could diverge sooner or later.
Well, relatively speaking. Most bitcoins have been bought by MSTR in the last 6 months, and their average acquisition price is already at $66K. Depending on the buying war going on between the two companies the difference in average acquisition price may not be very significant. MSTR has an advantage, though, obviously.
Regarding the latter, by diluting the stock so much, Saylor has had less than 50% voting rights for some months now, and the trend is going to be less and less. Although in both companies I believe that the main investors are not going to sell. They do know it's the key of success.
MSTR's being close to being liquidated was also greatly exaggerated. They had some loans that were collateralized and when the BTC price was in the upper $30ks, they mentioned that they would have to add more collateral if the BTC price went below $22k or something like that, and so when the BTC price went below $22k, they added more collateral, which they then proclaimed that the BTC price would have to go below $3,200-ish before they would have to add more collateral to some of their then outstanding loans.... including that they ended up having to renegotiate and to pay off Silvergate loan terms when Slivergate was being attacked by USA regulators, which certainly caused them to question the extent to which to use BTC as collateral in future debt arrangements. Even though MSTR's costs per BTC were in the $30ks while the BTC prices were in the $15ks, I think that the closeness of their being liquidated was overly exaggerated, and more of a fantasy of the bitcoin and MSTR naysayers rather than a reality.
Thank you very much for your response. I saw the question earlier when I wasn't logged in, and now I see that you have saved me from having to reply to the FUD.
... yet surely their recently setting up bitcoin-related yield instruments, in which the bitcoin is paid in dollars, these could be problematic towards causing them to continue to have to pay such yield, even during periods in which BTC prices might be quite low.
If you are referring to MSTY, my understanding is that there is no fixed obligation of paying that 8%, what has happened is that the last 12 months have been fabulous for MSTR and consequently MSTY has done extremely well, paying more than 100% annual dividend yield, but depending on how MSTR and the options market do, that 8% could be greatly reduced or not paid at all. I have not thoroughly researched the matter but from what I hear from the information I have been going by. If anyone knows the issue in more depth please share.
I personally have been ongoingly concerned about whatever custodial relations that they have, and surely I have my own doubts about if Coinbase has the coins that they claim to have, and I have my doubts about Coinbase's solvency and/or their abilities to manage money well.. since they have been shitcoiners for a long time and for years they have also been engaged in various attacks on bitcoin, yet MSTR supposedly custodies its coins in a few different places..
If we look at
this news from a year ago, MSTR held bitcoins in two companies and it seems that the one with more “risk” in that sense would be Fidelity Custody, which kept bitcoins in a pool together with other customers, while Coinbase had them separated. I understand that this can be audited and Saylor is not going to be fooled easily. Besides, as I think I already commented at that institutional level I think it is better to use custodials because there will be insurance and the possibility of legal action in case of mismanagement. It is not like a forumer with 0,3 bitcoin, that the best way he has to custodial them is himself in his HW.