MicroStrategy, also known as the "shadow ETF of Bitcoin", recently made a big news - it plans to issue 10 billion shares, from the current 330 million shares to 10.33 billion shares, with a total value of 3.3 trillion, with the goal of buying more Bitcoin. If calculated according to the current market value of Bitcoin, 3.3 trillion can buy all Bitcoins and there will be some left. Of course, the market will definitely rise when buying, and it is unrealistic to buy all BTC, so some people joked that they have completely transformed from a software company into a Bitcoin investment company, and even dream of becoming the "Bitcoin Central Bank". Is this an extreme operation or a strategic vision? Let's take a deep look today.
1. The Logic Behind MicroStrategy's Issuance of 10 Billion Shares:
1. From Cash Flow to Bitcoin Standard
MicroStrategy's predecessor was a traditional software service company, with an annual revenue of about $500 million. However, since CEO Michael Saylor announced Bitcoin as the main reserve asset in 2020, the company has undoubtedly transformed into a star project in the crypto circle. Why increase shares? In simple terms, the cost of stock dilution is exchanging future value for today's chips, aiming to increase the proportion of Bitcoin held per share, and their core belief is that Bitcoin's future value far exceeds the current price.
2. Why Has Bitcoin Become 'Digital Gold'?
Quoting a saying from Saylor: 'Cash is a block of ice, while Bitcoin is a volcano.' The limited supply mechanism of Bitcoin (21 million coins) inherently gives it scarcity and strong inflation resistance. This is exactly what MicroStrategy values. They believe that holding Bitcoin means locking in a future inflation hedge, just as companies frantically purchased gold and oil in the 90s.
3. Benchmark of Long-Termism: A True Pi Xiu (Mythical Beast) Plate Only Enters, Never Exits
In this market, short-sighted speculators are everywhere, while MicroStrategy's operations are the opposite—relying not on short-term gains, but betting on a story for the next 20 years. Issuing more stocks is undoubtedly a highly risky operation, but for long-termists who truly understand Bitcoin's value, it might be a choice that is completely misunderstood.
2. MicroStrategy's Potential Impact on the Crypto Ecosystem:
1. Supply-Demand Imbalance: Whales 'Drink Dry' the Market
MicroStrategy currently holds more than 2% of the total global Bitcoin supply. If they continue to buy after increasing their shares, the whale effect may further tighten Bitcoin's supply and demand, directly pushing up market prices. Moreover, as retail investors continue to exit, the holders of Bitcoin are becoming increasingly institutionalized, and institutions, being diamond hands that won’t sell, could lead to the scenario where Bitcoin rises faster as time goes on.
2. The Law of 'True Fragrance': Institutional Chain Reaction
When a publicly listed company bets hundreds of billions on Bitcoin and profits immensely, what do you think other traditional companies and financial institutions will think? This is the 'Herd Effect': if others have already made money and you are still hesitating, it equates to 'indirect losses'. MicroStrategy's actions may trigger a new wave of institutional interest, accelerating Bitcoin's global adoption; there are already listed companies silently following suit. This continuously strengthening leverage effect should be fully realized in the later stages of a bull market, and we can expect to see Bitcoin surpassing $200,000.
3. Potential Risks:
1. The Impact of Issuance on Shareholders: The Cost of Dilution
MicroStrategy raises funds by issuing new shares, which means existing shareholders' ownership percentages will be diluted. Although the rise in Bitcoin prices can offset this, if the market experiences a significant downturn, especially when share prices show a negative premium to Bitcoin, shareholders may question this 'all-in' reckless strategy.
2. Market Volatility: Bitcoin Is Not a Smooth-Sailing Asset
Bitcoin's volatility is well-known. MicroStrategy buys Bitcoin in high price ranges, and if the market corrects, the company's book value could suffer a heavy blow, causing share prices to plummet several times that of Bitcoin. This is a risk that traditional shareholders and institutional investors find hard to accept.
3. The Centralization Trend of Bitcoin is Manifesting:
MicroStrategy's holdings now account for more than 2% of Bitcoin's circulating supply. If more institutions follow suit, I can already faintly sense the gradual decline of decentralization; however, this may just be an inevitable trend in human development. The once ambitious dragon-slaying youth will one day grow scales and turn into an evil dragon. True idealism may forever exist only in ideals, and there has never been a so-called decentralized utopia. What matters in the end is personal gain. But there’s no need to overly worry about centralization; this is merely a manifestation of my overthinking. This is undoubtedly good news for vested interests in the market, as your chips can fetch a good price, and there’s no telling that it might transcend classes and change destinies.
4. Insights for Crypto Players:
1. Understanding the Future of Bitcoin Means Not Ridiculing MicroStrategy's Present: There is a classic question in the crypto world: Why do you want to buy Bitcoin? 90% will respond that it's because they believe the price will rise, which means your perspective is not on the same dimension as MicroStrategy's. I think a quote from Luo Zhenyu is quite reasonable to describe this: 'I am participating in a great social experiment, and I believe it has the potential to succeed in the future.' The emergence of Bitcoin signifies a transformation in the trust mechanism of human society from the bottom up, serving as a powerful weapon against mindless money printing and 'transfers to the bottom'.
2. Investment Mindset: From Profit-Seeking to Principle-Seeking
The Tao Te Ching has already told us the meaning of life: know, and then act on the way; if you have a bit more ability, the next level is to teach the way. Michael Saylor can be called the 'Bitcoin Evangelist', and his operations remind me of an old Chinese saying: 'A gentleman stores his tools and waits for the right time to act.' In this market where some people become rich daily while others face liquidation, MicroStrategy's persistence tells us: the truly impressive hunters are not those who stare at screens every day watching price fluctuations, but those who can see through the essence of things at a glance.
In summary: MSTR's issuance of 10 billion shares to purchase Bitcoin worth 3.3 trillion is more hype than substance, and it does not mean they are about to start buying Bitcoin again. However, as continuous positive news accumulates, it will create a strong synergy to push the market to a higher level. It is under this strong bullish sentiment that retail investors will amplify their risk appetite, daring to chase highs and leverage; various forces are also gathering their energy, and with the understanding king taking the stage, these major players may strike again.
In the WEB3 world, there are people like Saylor who believe Bitcoin is still very cheap and continuously reinforce the idea that buying virtual assets at today's prices is akin to buying land in Manhattan 200 years ago. As old money from web2 continues to suffer losses and become insolvent in traditional fields, money will always seek an outlet. Seeing that everyone in the web3 world is making money, even if it’s a desperate gamble, a large amount of capital will continuously flow in. Once these people start to profit, will it create a new strong consensus in society? For retail investors, does it also provide us with a direction to consider: being a naive person who continuously buys coins and boldly bets on future economic order might be more stable and profitable than chasing prices every day? However, even if we all understand this principle, I must remind you—do not let this lead you to take risks, especially by leveraging at high points, unless you truly have no attachment to this world. I've said my piece, and I hope you can hold on to your coins.
