According to DiscusFish, MSTR raises funds by selling convertible bonds and conducting at-the-market (ATM) offerings, which allow for the issuance of new shares at any time in the market. These funds are primarily used to purchase more Bitcoin, achieving the goal of “coin hoarding.” This strategy not only makes MSTR one of the largest corporate holders of Bitcoin but also attracts professional institutions, such as hedge funds, bond investors, and options traders, to participate. These institutions exploit the high volatility of MSTR’s stock for volatility arbitrage, capturing short-term profits.
However, the risks of this strategy are mainly borne by common shareholders. The extreme volatility of MSTR’s stock—partly due to fluctuations in Bitcoin prices and partly due to the “crash” effect (i.e., the issuance of new shares suppressing stock prices) resulting from ATM offerings—places retail investors under pressure from stock price declines in the short term. Nevertheless, common shareholders may also achieve “BTC Yield” through long-term holding, which refers to the increase in the amount of Bitcoin per share, thus exchanging short-term fluctuations for the opportunity to hold more Bitcoin in the long term.
At the same time, long-term Bitcoin investors (BTC holders) benefit from the continuous influx of funds into the market and the rising price of Bitcoin. MSTR’s strategy indirectly drives the value growth of Bitcoin, as its large-scale purchases increase market demand.
The tweet from Shen Fish has sparked widespread discussion. Some community members believe that those who do not invest in Bitcoin or MSTR stock may have become “losers” by missing out on the market’s upward opportunity. However, others point out that common shareholders may actually bear losses due to high volatility and issuance pressure, while other market participants engaging in volatility arbitrage may also become “invisible losers.”
Moreover, some analysts have noted that MSTR’s “infinite funding” strategy appears particularly successful when Bitcoin prices are rising, but if Bitcoin prices decline or market sentiment shifts, common shareholders and convertible bondholders may face greater risks. This phenomenon highlights the intersection of cryptocurrencies and traditional financial markets: MSTR’s strategy creates profits for some participants, while potentially placing risks or opportunity costs on others. As the Bitcoin market continues to evolve, the sustainability of MSTR’s model and its impact remain to be further observed by the market.