31st October 2024 > > ETFs & MSTR.
- Mark Timmis
- Oct 31, 2024
- 2 min read
tl;dr
Spot BTC ETFs are just one big hoover right now, ramping up the private price of BTC, with only a marginal effect on the public price. MSTR is outperforming.
Market Snap
Market Wrap
Another $900mm of inflows to the spot BTC ETFs yesterday. This neat little graphic from The Milk Road gives us great insight into the impact of the ETFs on the distribution of BTC:
Bloomberg’s senior ETF analyst, Eric Balchunas, describes this recent ramp-up of funds flowing into the ETFs as “institutional FOMO”.
The hedging of the sale of the ETFs takes place almost entirely in the OTC market, away from the gaze of the centralised cryptocurrency exchanges, which provide the public price of BTC. The private price is unknowable to us, but it almost certainly trades at a significant premium.
If that is the case, what might happen when retail FOMO – which directly impacts the public price – kicks in?
Curious Cryptos’ Commentary – MicroStrategy Inc. (MSTR)
MSTR’s appetite for BTC knows no bounds. The company has announced a 21/21 strategy for acquiring BTC over the next three years – a plan to raise $21bn in debt and $21bn in equity to buy $42bn of BTC. That equates to approximately 700,000 BTC at today’s prices:
MSTR has been an outstanding performer for the last year or so, quadrupling in price, bloodying the nose of the many sceptical hedgies whose business it is to short stocks to then throw mud by spreading FUD.
MSTR is a leveraged play on the price of BTC with no risk of liquidation. Plenty of perp traders, who take so much pain on a regular basis, would be far better off educating themselves about the alternatives to sacrificing their hard-earned cash to the perp exchanges, in the form of investing in MSTR and the miners.
If you can’t be bothered to delve into MSTR’s results, then this is one great take-away from the press release:
“As of September 30, 2024, the original cost basis and market value of the Company’s bitcoin were $9.904 billion and $16.007 billion, respectively.”
Curious Cryptos’ Commentary – MSTR leveraged ETF
Six weeks ago we saw the launch of T-REX 2X long MSTR ETF, a product that aims to double the daily gains or losses seen in the share price of MSTR.
It has gained 235% in those six weeks compared to 87% for MSTR stock, outperforming its objective, equivalent to an annualised return of 57,000%.
And you still want to deploy your capital threatened with liquidation risk by trading BTC perps?
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