Latest news with #GBTC
Yahoo
4 days ago
- Business
- Yahoo
Spot Bitcoin ETFs Broke 10-Day Inflow Streak With $358M of Outflows Thursday: JPMorgan
U.S.-listed spot bitcoin BTC exchange-traded funds (ETFs) recorded their first day of net outflows in 10 trading sessions on Thursday, according to a research report by JPMorgan (JPM). The Wall Street bank estimated that spot bitcoin ETFs saw $358 million of redemptions yesterday, according to a Friday report, with just one, BlackRock's iShares Bitcoin Trust (IBIT) attracting a net inflow. IBIT gathered in a net $125 million, the bank observed. In contrast, Fidelity's FBTC saw net outflows of $166 million, leading the redemptions, the report said. Other major contributors included the Grayscale Bitcoin Trust (GBTC) -$107 million, ARK 21Shares Bitcoin ETF (ARKB) -$89 million and the Bitwise Bitcoin ETF (BITB) -$71 million, the bank said JPMorgan said smaller outflows were also noted across the remaining issuers. The bitcoin price slipped 1.1% on the day, but market activity remained robust with trading volumes of $5.39 billion, well above the 20-day average of $2.81 billion, the report added. The world's largest cryptocurrency was trading around $105,656 at publication time.
Yahoo
4 days ago
- Business
- Yahoo
Michael Saylor Outlines Strategy's Bear Market Playbook at Bitcoin Vegas
At the Bitcoin conference in Las Vegas, Strategy (MSTR) Executive Chairman Michael Saylor was asked how the company would respond if its multiple to net asset value (mNAV) fell below 1, as it did during the previous bear market. In response, Saylor drew an analogy to the Grayscale Bitcoin Trust (GBTC), stating, 'GBTC is a closed-end trust… a corporate entity that has no operational flexibility to manage its capital structure.' He emphasized that unlike GBTC, Strategy is an operating business with the ability to take on debt and manage its capital dynamically. Saylor argued that 'for any company to fall down to below 1 mNAV, the shareholders have lost faith in the management structure of the business.' If Strategy's stock 'went to $1 tomorrow,' he said, the company would respond by selling its preferred stock or fixed income instruments STRK and STRF and use the proceeds to repurchase common stock, thereby recapitalizing the company. Highlighting the importance of flexibility, Saylor stated, 'To create value, you need to create option value to generate as much optionality as possible. The more options, the greater the value.' He concluded by asserting, 'The thing that makes our company a monster is having multiple at-the-market offerings (ATMs) in multiple capital markets,' underscoring Strategy's multi-channel access to liquidity and financial resilience. Sign in to access your portfolio
Yahoo
24-05-2025
- Business
- Yahoo
Strategy Slumps 6%, Leading Crypto Names Lower as Bitcoin Treasury Strategies Are Questioned
Crypto stocks suffered a red day on Friday, especially bitcoin BTC treasury companies such as Strategy (MSTR) and Semler Scientific (SMLR) — each down roughly 6% even as bitcoin slipped only a bit more than 2%. Japan-listed Metaplanet is lower by 24%. The picture looks even worse when zooming out: changing hands at $376 early Friday afternoon, MSTR shares are more than 30% below their all-time high hit late in 2024 even as bitcoin has pumped to a new record this week. The price action comes amid a continuing debate taking place on social media about the sustainability of Michael Saylor's (and those copycatting him) bitcoin-vacuuming playbook. 'Bitcoin treasury companies are all the rage this week. MSTR, Metaplanet, Twenty One, Nakamoto,' said modestly well-followed bitcoin twitter poster lowstrife. 'I think they're toxic leverage is the worst thing which has ever happened to bitcoin [and] what bitcoin stands for.' The issue, according to lowstrife, is that the financial engineering that Strategy and other BTC treasury firms are employing to accumulate more bitcoin essentially rests on mNAV — a metric that compares a company's valuation to its net asset value (in these cases, their bitcoin treasuries). As long as their mNAV remains above 1.0, a given company can keep raising capital and buying more bitcoin, because investors are showing interest in paying a premium for exposure to the stock relative to the firm's bitcoin holdings. If mNAV dips below that level, however, it means the value of the company is even lower than the value of its holdings. This can create significant problems for a firm's ability to raise capital and, say, pay dividends on some of the convertible notes or preferred stock it may have issued. Shades of GBTC Something similar happened to Grayscale's bitcoin trust, GBTC, prior to its conversion into an ETF. A closed-end fund, GBTC during the bull market of 2020 and 2021 traded at an ever-growing premium to its net asset value as institutional investors sought quick exposure to bitcoin. When prices turned south, however, that premium morphed into an abysmal discount, which contributed to a chain of blowups beginning with highly-leverage Three Arrows Capital and eventually spreading to FTX. The resultant selling pressure took bitcoin from a record high of $69,000 all the way down to $15,000 in just one year. 'Just like GBTC back in the day, the entire game now — the whole thing — is figuring out how much more BTC these access vehicles will scoop up, and when they will blow up and spit it all back out again,' Nic Carter, partner at Castle Island Ventures, posted in response to lowstrife's thread. The thread also triggered replies from MSTR bulls, among them Adam Back, Bitcoin OG and CEO of Blockstream. 'If mNAV < 1.0 they can sell BTC and buy back MSTR and increase BTC/share that way, which is in share-holder interests,' he posted. 'Or people see that coming and don't let it go there. Either way this is fine." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
15-05-2025
- Business
- Forbes
Why MSTR Is Worth More Than Its Bitcoins
MSTR is worth more than its bitcoins. The biggest debate raging on Twitter/X is on the valuation of Strategy, the company that holds the most bitcoin. This is also the most fascinating story in corporate finance last year. Strategy's stock eclipsed most of the S&P 500 with a 2024 return of more than 320%. But the question is: Is it worth its current $113+ billion valuation? For much of 2024, Strategy's stock has been highly correlated with bitcoin, often rising and falling in sync with the underlying asset. That correlation has decoupled somewhat in 2025, as Strategy's bitcoin purchases have vastly increased in size following the Q3 2024 earnings call, where chairman Michael Saylor proposed a $42 billion capital raise for more bitcoin. The current debate focuses (possibly to a fault) on Strategy's current financial engineering. The company issues equity and debt to buy bitcoin. This dilutes shareholders. More novel is the company's convertible debt strategy. Strategy issues convertible bonds to the fixed-income market with very low (sometimes zero) interest rates and a conversion option that activates if the stock price clears a threshold. The bond is essentially a call option, which lifts the returns for the bondholders if the stock continues to appreciate. This provides fixed-income investors bitcoin exposure, which they may not be able to acquire otherwise. The big debate is whether Strategy's market value is justified, given that it trades at a 2x premium to the net asset value of its bitcoin holdings (mNAV). Over the last two years, mNAV has fluctuated from 0.73 on Dec 31, 2022, during bitcoin's bear market, to a peak of 3.83 on November 21, 2024. Critics of Strategy claim that this is another example of GBTC, which also traded first at a premium, but then later at a discount. It is true that if you view Strategy simply as a vehicle for holding bitcoin, then the bears are correct. It should not trade at a premium to NAV, and the company is currently overvalued. However, Strategy is not just another vehicle for holding bitcoin. Its true market value derives from what it will do with that bitcoin. That value is not what Saylor is currently discussing, namely, providing financial engineering solutions to the fiat capital markets. That is Strategy's business today, but in the long term, the real opportunity for Strategy is to serve as the nation's first bitcoin bank. As the world continues its march to a bitcoin standard, more institutions will hold the world's most secure digital asset. The real users of on-chain bitcoin will be institutions, not individuals. With high demand, transaction fees will rise and eclipse the budget for the median-income individual. Bitcoin will become a settlement layer between institutions, and as this happens, there will be benefits that will accrue to a single corporate entity that has more bitcoin than any other. Ultimately, the largest corporate holder of bitcoin can serve as the economy's lender of last resort (LOLR). During times of financial distress, this large holder can serve as the only entity that can absorb losses when no one else can. This is not without precedent in US history. Warren Buffett served this role during the Great Financial Crisis; he was able to negotiate favorable terms with Goldman Sachs in their time of distress because he was the pool of patient capital. JP Morgan served in this role in the US during the Panic of 1907. While capital markets are also effective pools of capital, there is a benefit to having a single entity that acts with conviction during times of distress. Of course, there will be other banks on a Bitcoin standard in the future. These banks will borrow and lend to companies and individuals. But those banks will themselves need a bank, an entity that has the most bitcoin that can serve as a lender of last resort if needed. This LOLR function rests on sound microeconomics. As the capital controlled by an entity grows, its risk aversion per unit of capital decreases. As a simple example, the average American may be too risk-averse to accept a coin flip that pays $1 million on heads and loses $950,000 on tails, even though it has a positive expected value. But such a bet is no problem for Warren Buffett. For any fixed gamble, risk aversion decreases in wealth, and this 'wealth effect' gives value to large holders of capital. You might think that the Federal Reserve should play the role of the lender of last resort. That is certainly the marketing pitch of central banks today, and what they claim to be one of their core value propositions. Central banks control the money supply and therefore can print money as needed to support banks as part of the Fed's mandate for price stability. However, if you look back at history, the Fed was not the first, but rather the second choice for a lender of last resort. The original LOLR was the large private banks in the US, most notably J.P. Morgan and the Suffolk Bank of Boston. It was the banking crisis of 1907, when John Pierpont Morgan coordinated a private syndicate of bankers to recapitalize the smaller US banks under distress. That inspired the idea of a central bank (to serve as a public version of J.P. Morgan). So why can't the Fed play this role in the future? There are many reasons why private banks and companies should serve as the LOLR. For one, the Fed is unconstrained in its printing of dollars and is therefore more likely to abuse that power in its attempt to stabilize the US economy. Even though the Fed might be able to provide cheap capital during a time of financial distress, there is nothing that constrains the Fed from also providing that cheap capital at other points in time, which historically leads to bad outcomes (inflation and the business cycle). Second, capitalism forces private banks to adhere to strict profit and loss decisions, and thereby their decisions to serve this rescue function during times of financial distress must make economic sense for them. It is less likely that a future bitcoin bank would lead to unintended consequences, the kind that often arises from government intervention. Third, a commercial bitcoin bank will have more direct contact with the marketplace, better access to talent, and an ability to write incentive contracts, which will all improve its efficiency in deploying bitcoin as needed. Ultimately, a large bitcoin bank is a free market solution to the problem of a systemic financial crisis, unmoored by the inefficiency of a government bureaucracy. Strategy is accumulating bitcoin today faster than any other entity in the market. This could change, however, if a larger company (or even nation-states) starts to accumulate bitcoin. However, nation-states will serve their interests first, rather than serving as a bitcoin bank for the economy. A larger company could enter the race, but the entry price is steep, at least $55 billion. And no large cap has yet expressed an interest in buying that much bitcoin. That leaves the bitcoin miners. It is possible that a miner could acquire bitcoin more cheaply than Strategy buys it on the open market, hold that bitcoin over the long term, and ultimately serve this LOLR function. However, just as gold miners of the past have not turned into banks, bitcoin miners will not transform into bitcoin banks. Rather, the more likely scenario is that a future bitcoin bank would acquire a miner to lower the acquisition cost of its bitcoin. This acquisition could make more sense for bitcoin rather than in the traditional gold market, since the domain knowledge required for bitcoin mining and bitcoin banking is closer than for gold mining and fiat banking. The market may take its time to value Strategy as the future bitcoin bank, and its mNAV may shrink before it expands. The bottom line is that there are economies of scale that come from capital accumulation. Valuing Strategy only on its net asset value today is like valuing Tesla as a car company; Tesla's valuation only makes sense if you reframe it as a technology company. The same is true for Strategy. It is not an alternative to the Bitcoin ETFs. Rather, it could become the world's first bitcoin bank, and that will have high economic value.
Business Mayor
23-04-2025
- Business
- Business Mayor
BlackRock's Bitcoin ETF IBIT Hit $4.2 Billion in Trading Volume as Bitcoin Price Surpasses $91,000
BlackRock's spot Bitcoin ETF, IBIT, recorded a massive $4.2 billion in trading volume today as the price of Bitcoin soared above $91,000 for the first time since early March. According to data from Barchart, IBIT traded a staggering 81,098,938 shares, ending the trading session at a price of $52.08. The surge in ETF activity comes on the same day Bitcoin climbed to $91,739, according to Bitbo. This marks the highest price level since April 8, when Bitcoin hit a low of $75,603. The strong upward momentum signals renewed buying pressure in the market, particularly from institutional investment products like spot ETFs. Fidelity's spot Bitcoin ETF, FBTC, also saw significant trading activity, with $425.17 million in volume. Meanwhile, Grayscale's GBTC posted $250.91 million, Ark Invest's ETF recorded $170 million, and Bitwise's fund traded $120 million over the day. Earlier in the day, BlackRock's IBIT also reached an all-time high when measured against the Nasdaq index, a noteworthy milestone indicating the growing strength and investor confidence in the fund and Bitcoin. High-volume trading days such as this where the price of BTC surges up often reflects strong inflows. However, the official figures for net inflows and outflows for today's ETF activity will not be available until later this evening as the wealth managers publicize them. As Bitcoin's price continues to trend upward and ETF products show strong trading volumes, the market is now being shaped not just by investor speculation, but also by fundamental demand from corporate and institutional buyers. The impact of regulated financial products like spot ETFs is being amplified by a growing wave of corporate adoption. In addition to institutional interest via ETFs, public companies are increasingly turning to Bitcoin as a reserve asset. Michael Saylor's Strategy has continued to aggressively acquire BTC, most recently announcing the purchase of 6,556 more coins. Semler Scientific has also joined the trend, reaching over 1,100 BTC in holdings and recently filing to raise another $500 million to buy more. GameStop is preparing to enter the market as well, having raised $1.5 billion for a Bitcoin treasury strategy dubbed 'Project Rocket.' These corporate moves are injecting additional demand into the market, further contributing to upward price momentum. Together, the surge in ETF activity and rising corporate adoption appear to be forming a powerful feedback loop, helping to push Bitcoin's price to new highs. While final inflow data for today's ETF trading will arrive later this evening, the combined impact of institutional buying and balance sheet strategies from publicly traded companies is reinforcing Bitcoin's status as both an investment asset and a long-term store of value. READ SOURCE
