Let me first mention a digression,
A certain large Eastern country operates very sluggishly in the financial sector, completely lagging behind the times. Digital assets, including cryptocurrencies and their derivative financial products, have long been legalized or quasi-legalized. As for the money laundering issues mentioned by many outsiders in the cryptocurrency realm, they are simply not a concern. Underground banks, illegal currency exchanges, domestic loans for foreign debt... why is the focus specifically on the cryptocurrency field?
The real problem is that Dongda simply does not dare to give the tax bureau the power to check taxes and monitor personal consumption/income situations, fearing that it might backfire and embarrass themselves if they investigate their own people 😳.
As for foreign exchange controls, with exports amounting to tens of trillions a year, is there really control over foreign exchange? Can it be controlled? In fact, over the years, the ordinary people of Dongda have missed countless opportunities. Quality companies from Dongda have gone to the United States and Hong Kong to list, while the people of Dongda cannot buy stocks in these quality companies. This situation is simply ridiculous. There is also another situation. American companies are doing well in the Dongda market, and Dongda people are loyal consumers. So can these Dongda people buy stocks in this American company, thus supporting the enterprise while also enjoying the dividends of its development?
However, the fact is: NO
The ordinary people of Dongda have missed countless opportunities outside over the past few decades. They have lost who knows how much. They can only be trapped in a cage, either buying houses to take over or being tricked into Myanmar A.
Actually, it's quite uninteresting.
Back to the main topic,
Actually, the story of this round in the cryptocurrency world mainly revolves around Trump and Musk, equivalent to having policy-level insurance, while the approval of the Bitcoin spot ETF has made it convenient for mainstream funds to enter. However, the core point is still the increase in liquidity.
The mechanism of this round is that MicroStrategy issues convertible bonds to purchase Bitcoin, while the stock of MicroStrategy has a very high premium, amplifying the Bitcoin price increase. Convertible bonds, as corporate bonds, provide a pathway for traditional financial institutions (such as insurance, retirement pensions, etc.) to enter the Bitcoin market, as many institutions can only buy fixed-income bonds and cannot purchase securities. The bond market is a trillion-level market, much larger than the securities market. The convertible bonds of MicroStrategy have outperformed Bitcoin this year, due to the premium providing an amplification effect. Bond investors have the principal guaranteed, can earn a small amount of interest, and more importantly, can convert to equity at a high point in Bitcoin market value, enjoying excess premiums. Thus, this flywheel spins, discovering that buying bonds to invest in Bitcoin inflates the premium. Meanwhile, with the appreciation of Bitcoin, bond prices rise, attracting more funds. Thus, Bitcoin prices soar.
This design is more reliable because bonds must be redeemed after five years; if the price is not good at that time, they can be converted to stocks, which greatly reduces the risk of a blowout. Five years later is after the next halving cycle, and barring any accidents, the price will be higher. If this tool is used well, with Bitcoin's deflation, MicroStrategy could drive the Bitcoin price to $500,000 in the next cycle, and MicroStrategy's market value could reach trillions, becoming the largest Bitcoin institution, connecting the bond market and the Bitcoin market.
