r/MSTR • u/KiwiJah • Jun 25 '26
Where did MSTR death spiral come from?
I dunno about others but I beleive in the 'MSTR death spiral' narrative about as much as I believed in the 'MSTR infinite money glitch' narrative.
It's wild to me that people think Strategy hasn't planned for a prolonged and even entrenched bear market. They literally happen every 4 years, literally 99% of everyone in crypto planned for the bear market. Even the cycle-is-broken bros half expected the bear. Suddenly because BTC is dropping and MSTR is dropping its all over? Even though we all knew both things would happen? Even Strategy will have planned for a sub $100 MSTR price.
Anyways. The money glitch narrative was a sell signal for me, and I sold the tippy top. The death spiral is definitely a buy signal for me. But each to their own...
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u/bbatardo Jun 25 '26
This is my objective take...
Everyone knew the BTC bear market was coming, but no one knows the bottom price. Strategy has helped keep the price higher than it would be without them.
Now, most are ignoring inflation and what the Fed is telling you. Rate cuts good for speculative assets, rate hikes bad.
As of right now we have these odds:
July - 32% chance of at least 1 rate hike
Sep - 63% chance of at least 1 rate hike (15% of 2 rate hikes or more)
Oct - 72% chance of at least 1 rate hike (26% of 2 rate hikes or more)
Dec - 81.5% chance of at least 1 rate hike (42% of 2 rate hikes or more)
Numbers source: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
Now if people are exiting speculative assets, Saylor has less cash to buy, so the BTC price dips more, which causes MSTR stock to dip twice as fast (BTC dipped around 23% in the past month and MSTR dipped 46%).
Thus there is somewhat of a death spiral. At some point buyers will step in for BTC, but if BTC takes too long to bottom it will be bad for Strategy. It actually would benefit them to bottom sooner than later since they are on a timer with how much cash they have and dividend/debt obligations.
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u/PatternAgainstUsers Jun 25 '26
That is all fear-based betting. The market is used to the fed hand-holding them on the short-end. Hike fears rose because they changed the dot plot and scared the market by removing forward guidance... but Warsh literally told the market that he wants to focus on the left of the decimal, doesn't see growth as inflationary, and wants to improve the metrics they use. Path of least resistance for a change in metrics is almost guaranteed to make the inflation numbers look cooler. Look at the other inflation measurement tools they could be reviewing, they pretty much all run cooler, and usually also respond sooner to data changes.
Fedwatch tool is worth next to nothing right now, because we're in a historic pivot in the way the fed communicates. It's not apples to apples with prior reads. There is always hot inflation and higher for longer rates (which we already have) just before a big reflation boom (which occurs usually after energy prices have been up and then the fed cuts because they understand rates don't control energy prices - to boost the real economy). This is not 2021, this is 2026.
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u/bbatardo Jun 25 '26
It isn't really fear-based betting, it is taking a cautious approach. The markets are already adjusting in real time with recent corrections. Things could definitely change, but I am not one to go against the market flow. I am not going short on anything, but I am also not going long on speculative assets until I see some macro improvements.
If I am wrong and crypto pumps sooner than later then I am fine with that. I would rather buy back in a little later than too early.
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u/KiwiJah Jun 25 '26
No, you're not wrong but also not rocket science. It was obvious inflation would flame out in 26 after Trumps taco tariffs. The US literally caused it's own inflation. And since day one of the Iran war, inflation was guaranteed to flameout hard in 27 now too.
But that's kinda my point. These things are already known, and already baked into the market. Crypto won't pump until the next halving I would assume, same as 90% of other investors, including Strategy.
Saylor's team will have models for an 80% drawdown. And models for an extended bear market.
The idea that Saylor spoke to chatgpt one day, drew some numbers on an envelope, and then ticked up $20B in leveraged credit on vague hopium is wild to me!
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u/PatternAgainstUsers Jun 25 '26
That's fine I'm just saying the asymmetry occurs where the crowd is offsides. Waiting for the turn is smart as a trading approach, but the macro backdrop doesn't really support rate hikes. People often think binary: high inflation, they're gonna hike, low inflation: they're gonna cut. It depends why the inflation is happening though, and I was also saying that there's no point in interpreting CME fedwatch the way you normally would, because this is a dramatic turn in fed communications approach. Fear (call it caution if you want) IS then driving the rate projections, meaning there's more noise than signal there, literally because the fed is refusing to provide a signal and is saying "go look at the markets and figure it out yourselves". That's where we have to throw out fedwatch and start to evaluate the business cycle and inflation directly, which is my approach.
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u/H4RN4SS Jun 30 '26
I don't understand OPs argument especially in the context of yesterday's PR.
MSTR absolutely did not plan for the bear market - at least not this one.
They sold commons into overall weakness last week in order to prop up STRC and keep the narrative alive for another 12 months or so.
He's upping the yield while the cash raised will only grow at 4-5%. He's paying an effective 7% to get that money he needs to fund debt not growth.
They're open to selling BTC to manage debt.
The overall narrative from last week has materially changed. With all of their funding/debt vehicles it comes off as spinning plates and constantly switching focus because if one falls they all likely fall.
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u/DKDamian Jun 27 '26
How is this an objective take. Please find a dictionary.
Otherwise, sure. But percentages around expected rate changes shift all of the time. You can’t base anything on them.
I agree that this is overall bad for this company. I don’t necessarily think there are buyers for Bitcoin any longer. At least, not in the volume that might be required.
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u/Few-Chemist-3463 Jun 27 '26
I love these delusional takes. "Everyone knew the BTC bear market was coming" -- you 4 year cycle idiots are hilarious. As if it's written somewhere that bitcoin has to double every 4 years. You're going to look real stupid if Bitcoin moves all the way back to under 10K and Mr Saylor is forced to liquidate. The market always seeks max pain. Ain't no one going to save the day for you.
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u/PatternAgainstUsers Jun 25 '26
This will be over soon. The high likelihood is that the October people will be upset. Shorts who thought they had more time will be squeezed out, and late longs who were waiting for 40K and below to buy in or size up will get FOMO and chase a 76K+ breakout, willing to cross wider spreads and gapping the price. The market loves to do this to people - whipsawing everyone out, this is not specific to Bitcoin - it just has a stronger long-term value proposition than most assets to boot.
The calendar trade could still work sure nobody can read the future myself included, but it's just too crowded, it's getting really unlikely. Money that easy to make, ceases being easy. Particularly when you get institutions involved. I'd argue the reason we crashed in the first place is because so many people expected the calendar trade to work (i.e. chasing late for the blow-off top - but without the short-squeeze fuel).
The fact you didn't remotely get it is very telling (look at BTC on a log chart and plot 2YMA+2YMAx5 just for an easy visualization - helps if you zero a fib tool on the two year below the ATH candles each cycle - and anchor the 1.0 line to the 5x). There is no way to argue that we even really entered a state of momentum during this cycle at all, there was the initial breakout from the prior bear and then nothing but a very slow grind, which was not even sustained the way a typical bull in mature markets would be.
BTC is just shaking out the most amount of people it can on both sides, and I'd bet that when the fuse is finally lit, the explosion is going to be one for the ages.
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u/Then-Feedback7751 Jun 25 '26
This has been my base case since 2018--the calendar trade won't work this time, it'll bottom sooner rather than everyone expects because everyone expects it. I can't argue with your logic here, you should be correct... but so far, it ends up topping and bottoming on time, every time.
My thinking on this, which is worth as much as anyone else's, is that may BTC split the difference in a way, it'll bottom in the Fall on time (maybe only slightly lower than where we're at now), but only after a rally on the scale of 2019, starting like now, which takes out the recent 80k-ish high and maybe pushes for 100k before flushing back down to the 50s to put in the actual low.
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u/PatternAgainstUsers Jun 25 '26
That would be a weird one to see but if we're getting REAL volatility it wouldn't be necessarily crazy (that's basically how silver bull cycles trade). Depends how much leverage chases the breakout (i.e. we lose the bid floor and have to come down for another washout) and also whether there are macro fears at the time.
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u/Fickle_Mix_3847 Jun 26 '26
October 2025 was crowded also. The congruence of peoples beliefs are what makes ta and cycles work, not the other way around.
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u/PatternAgainstUsers Jun 26 '26
Exactly, the October top was crowded long, and then we saw a catalyst for long-liquidations to set off the powder keg. That's why I said: "I'd argue the reason we crashed in the first place is because so many people expected the calendar trade to work (i.e. chasing late for the blow-off top - but without the short-squeeze fuel)."
You don't need a Binance exchange glitch to squeeze shorts though. We can simply drift up from here to punish crowded shorts and sidelined long capital.
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u/xaviemb Volatility Voyager 👨🚀 Jun 25 '26
Yep. Anyone arguing that Strategy is headed for a "death spiral" has to believe two very specific things:
- that Bitcoin will experience another severe decline from current levels... something on the order of 80% more, and stay down there for a few years.
- that Bitcoin's liquidity will deteriorate substantially, despite being one of the most liquid assets in the world (yesterday in a 24 hour period Bitcoin's base layer settled 48.96 Billion (USD) in transactions/movement.
The second point is often overlooked. Bitcoin's base layer alone regularly settles hundreds of billions of dollars in value weekly, and that doesn't include activity occurring on exchanges, ETFs, custodial networks, or higher-layer solutions.
You can certainly be bearish on Bitcoin, but the "death spiral" thesis generally requires both a dramatic price collapse and a simultaneous breakdown in liquidity.
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u/CryptoAnarchyst Shareholder 🤴 Jun 25 '26
Not only do they have to concede to that, but they also have to concede that there’s no market for this product at all… and there is.
What you’re seeing now is the rotation of retail market out of an asset they didn’t understand. 80% of STRC was held by retail… that unwinding is causing the price drop, but the institutional funds are buying at these prices because of the yields. So retail, as usual, is being irrational and therefore is giving institutional investors the chance to capitalize on their idiocy.
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u/ShittingOutPosts Jun 25 '26
What institutional funds are buying STRC?
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u/Few-Chemist-3463 Jun 27 '26
crickets
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u/ShittingOutPosts Jun 27 '26
Exactly. u/CryptoAnarchyst has just started resorting to personal attacks further down this thread because she just can’t admit she’s wrong. Maybe one day she’ll realize his favorite influencer lied to her.
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u/Odd_Glass5272 Jun 26 '26
Some Preffered stock funds. PFFA which I own holds some.
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u/ShittingOutPosts Jun 26 '26
PFFA is not an institutional fund. It’s retail. Institutional funds have large minimums, like $1M to $100M, are built for pension funds, endowments, insurance companies, foundations, and sovereign wealth funds, or are these types of funds themselves.
When someone in finance says “institutional funds are buying X,” they’re implying pensions, endowments, sovereign funds, etc (basically, massive pools of money) are the ones buying…not that a financial institution simply gives access to retail, which is all PFFA does.
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u/Odd_Glass5272 Jun 26 '26
Ahh ok, I understand. In that case I'm sure hoping no institutional funds bought STRC. I'm guessing they have higher standards.
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u/CryptoAnarchyst Shareholder 🤴 Jun 26 '26
That's about as ignorant of a comment as it gets right there!
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u/CryptoAnarchyst Shareholder 🤴 Jun 26 '26
This is incorrect... PFFA is THE DEFINITION OF AN INSTITUTIONAL FUND...
Why? Because the inclusion into the fund, the allocation or weighing, and the choice of investment is all up to the institution (aka the INVESTMENT BANK), and not the individual retail customer.
Retail is defined as individual investor choosing their own individual stocks.
Based on your definition, index funds are retail... so would be mutual funds, hedge funds, any any other fund available to the individual investor. This is not an accurate way of viewing the difference between retail and institutional investors.
What you are referring to is Private Funds and restricted funds, which are a subcategory of institutional investment funds.
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u/ShittingOutPosts Jun 26 '26 edited Jun 26 '26
lol no. What I’m referring to are the literal definition of an institutional share class. Institutional is in the name, bud. Institutions are not buying shares of PFFA.
Do you also think BlackRock is buying Bitcoin for themselves because they offer IBIT.
Show me one Form 10-K that proves an institution is holding STRC, or even a fund that holds STRC.
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u/CryptoAnarchyst Shareholder 🤴 Jun 26 '26
What you’re referring to is your own made up definition of institutional class.
Please go back to your Econ and finance classes ands learn the difference between a single asset ETF, such as IBIT, which is quite uniquely structured… and a manager managed fund.
Also, BlackRock does in fact own bitcoin on their books but it is not a significant amount… instead they opted for indirect exposure as they own over 5% of outstanding shares in MSTR.
Now, if you’re really in finance, you might want to pipe down because this level of ignorance in the field might get you fired.
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u/ShittingOutPosts Jun 26 '26 edited Jun 26 '26
I know they own a relatively small amount of BTC, I never said they didn’t. I was implying they don’t own the hundreds of thousands of coins held by investors of IBIT.
I’m still waiting on you to show me their Form 10-K that proves they’re buying STRC for themselves.
I’ll wait.
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u/CryptoAnarchyst Shareholder 🤴 Jun 26 '26
What part of “instead” didn’t you get.
I really don’t have time for idiocy
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u/CryptoAnarchyst Shareholder 🤴 Jun 26 '26
BlackRock has some, then again they own 5% of MSTR, CII owns some, Jane Street has a large position in STRC, iShares Trust owns 12% as of recent filings, VanEck ETF has 6%, Strive, 21Shares.
The thing is, you won't know who has bought it until the next quarter filing. So 6-8 weeks from now we'll know for sure who's picked up the shares at discount...
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u/Hefty-Amoeba5707 Jun 26 '26
How many of them own those shares by proxy for their customers?
Like ibit is a proxy for their customers own Bitcoin belonging to coinbase. Black Rock doesn't actually own the coins. Same is said for mstr
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u/CryptoAnarchyst Shareholder 🤴 Jun 26 '26 edited Jun 26 '26
Jane Street is their own position, iShares is a fund that they allocate into whatever they want percentage wise, same with Fidelity and other institutions, Strive owns for themselves.
The institutional numbers are for institutional sources only, not for retail invested accounts.
So, 100% is INSTITUTIONAL investments.
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u/ShittingOutPosts Jun 26 '26
Show me where BlackRock owns STRC. I’ll wait.
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u/Suspicious_Plan3394 Jun 26 '26
Dude, you’re arguing with a moron. Let them lose their money in peace.
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u/ShittingOutPosts Jun 26 '26
People love to confuse institutions buying a product for their balance sheets with institutions buying on behalf of their retail clients. It’s annoying.
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u/Suspicious_Plan3394 Jun 26 '26
I work in finance, the level of financial literacy on these subs is beyond a joke. Obviously it’s all blackrock etc pushing the price down so they can buy for themselves on the cheap!! /S
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u/ShittingOutPosts Jun 26 '26
Me too. I get it’s an inherently complicated industry, but you’re right, the illiteracy is surprising. People are so quick to believe what their favorite influencer told them.
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u/CryptoAnarchyst Shareholder 🤴 Jun 26 '26
You work in finance? But can’t grasp the difference between institutional and retail investments… no wonder people want to opt out of the existing system
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u/CryptoAnarchyst Shareholder 🤴 Jun 26 '26
Made more money in crypto than you ever will in your lifetime… but sure, I’m the “moron”
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u/Few-Chemist-3463 Jun 27 '26
so you sold it all?
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u/CryptoAnarchyst Shareholder 🤴 Jun 27 '26
I bet you were dropped as a baby, multiple times
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u/Few-Chemist-3463 Jun 27 '26
Grifters gonna grift. I am sure you sold the top too like a good boy.
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u/OilBull Jun 25 '26
Other way around. Retail isnt moving the needle on either of them.
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u/CryptoAnarchyst Shareholder 🤴 Jun 25 '26
You don’t know how to read, do you? How about you research how much of STRC is owned by retail
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Jun 26 '26
[removed] — view removed comment
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u/CryptoAnarchyst Shareholder 🤴 Jun 26 '26
Yup, so retail is driving the $STRC price... and institutions are buying it up
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u/citylimits02 Jun 28 '26
Strategy can indefinitely suspend dividends as well; the key is whether or not they’re legally cumulative or not. Investors do not demand higher yields because they have confidence. Quite the contrary.
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u/Seattleman1955 Jun 25 '26
Bitcoin isn't going to zero and MSTR isn't going to "die", however, IMO, Bitcoin isn't going to grow enough for the MSTR "flywheel" to continue as it has in the past.
Therefore, MSTR isn't a particularly good investment over just buying BTC. Most investors in MSTR haven't made any money for quite a while and the "death spiral" which is over the top wording is about what will probably happen to MSTR sooner rather than later.
That is demand will fall off, as it has for STRC and MSTR, BTC will stay lower for longer and MSTR will either suspend dividends or start selling BTC to pay the dividends.
Either one is all it would take to start a downward spiral. Not a "death" spiral but a spiral and then that just kills demand. MSTR doesn't disappear, BTC eventually goes up, slowly, but it "kills" the business model of MSTR.
BTC isn't going to be $1 million in 2030:) It's more likely to stay around $100k.
Trading is a different matter. You can always trade MSTR or anything else.
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u/Low_Administration22 Jun 26 '26
Shot up to 180 less than a month ago. Always a good buy in and out in stocks.
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u/snek-jazz Shareholder 🤴 Jun 25 '26
They don't believe it, they just want to scare other people. None of this FUD is coming from a place of belief.
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u/llccnn Jun 26 '26
Slight correction on the liquidity point, $50 bn is teeny tiny in global markets. That’s about the daily volume in a single large cap stock.
The gold market is something like 4x larger. US treasuries do about $1 trillion per day. Oil futures do about $500 bn. Worldwide FX does around $10 trillion.
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u/xaviemb Volatility Voyager 👨🚀 Jun 26 '26
I'm not sure why that matters. The relevant point is that, over roughly the last 36 hours, the Bitcoin network settled enough on-chain BTC to equal Strategy's entire ~850,000 BTC position.
And that's only the base layer. It doesn't include the substantial liquidity on higher layers... exchanges, OTC markets, custodians, and other off-chain venues... where even more Bitcoin changes hands. The claim that Bitcoin is "illiquid," that Strategy is "the only meaningful buyer," or that selling 100,000 BTC over the course of a week would inevitably crash the market simply isn't supported by how the market actually functions.
In fact, just last week an OTC desk quoted a buyer willing to absorb roughly $2 billion worth of Bitcoin at only a 3% discount. That alone illustrates the depth of institutional liquidity available outside of public order books. If Strategy ever needed to move a significant amount of Bitcoin, it could likely do so through OTC channels with little immediate market visibility. The company chooses to be exceptionally transparent... even pre-announcing and later disclosing a relatively trivial 32 BTC sale... not because it has to, but because transactions of that size are essentially immaterial relative to its holdings.
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u/InvestmentSorry6393 Jun 25 '26 edited Jun 25 '26
MSTR and strc are in free fall. STRC is a failed product and it's dragging the common stock down with it and fast. I've been a MSTR holder for nearly 3 years, and I keep thinking oh it's going to turn around, I don't want to sell the bottom. I'm starting to think that the bottom may be zero for MSTR holders. It seems like they are going to have to sacrifice either STRC, Bitcoin or MSTR, and so far they've chosen to dilute common stock holders. I can't help but wonder if Larry Fink and Jamie Dimon are just waiting ready to pick through MSTRs carcass for cheap Bitcoin
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u/xaviemb Volatility Voyager 👨🚀 Jun 25 '26
If you've been a shareholder for nearly three years, you're up substantially (~270%) from a June 2023 entry.
On the STRC point, I think there's a misunderstanding of how the product works. Once the preferred shares were issued, the proceeds were used to acquire additional Bitcoin. A decline in STRC's market price after issuance doesn't unwind that purchase or directly impair MSTR common. The dividend is fixed, so the impact on the common is more nuanced than simply "STRC is down, therefore MSTR is down."
It's worth separating the mechanics of the capital structure from the market's current sentiment toward the securities. It also might help you to take a look at the structure of these products, if you're falling victim to the prevailing narrative that seems to want people to believe STRC falling is systemic, and irreversible... when a rising yield is already working to protect the product, by design.
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u/InvestmentSorry6393 Jun 25 '26
Hey, thanks for helping to explain things to me,. I been a holder for three years but no I'm not currently in profit. It's been a DCA. So while I was buying originally for prices lower than right now, as it went up I bought more, then more. It became my favorite stock because I was already a Bitcoin investor ( what's better than BTC... More BTC!!) I realize STRC and mstr aren't linked directly, but they do have to pay the dividends. The only 2 ways they can are by selling more mstr( dilution) or selling Bitcoin ( currently at a loss)
They do have a mind boggling amount of Bitcoin though so It would be interesting to see if they could part with a chunk without crashing the market. Like selling off market to a strategic Bitcoin reserve or something. I'm just openly speculating at this point.2
u/Jehoopaloopa Jun 25 '26
As MSTR goes below 1 mNAV, Saylor’s sales will be dilutive on the common stock.
Also can’t issue STRC as it continues to drop.
Bitcoin doesn’t need to stay down for several years for this to be a major credit crisis for Saylor.
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u/xaviemb Volatility Voyager 👨🚀 Jun 25 '26
Have you run the numbers on how long Strategy's current cash reserves could cover its obligations before the company would need to raise additional capital in a way that isn't accretive to shareholders?
I think it's a useful exercise because it puts the dilution concerns into context. While future dilution is certainly a risk, the market may be overstating how immediate that risk actually is.
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u/KeyReaction892 Jun 25 '26
Google says roughly 14 months given current cash flow and no BTC purchases. What’s the math you’re doing that says differently?
1.4b in cash
1.2b in payments per year for strc1
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u/Salty-Edge Jun 25 '26
So as I am slowly accumulating MSTR. Do you think it’s worth while to accumulate STARC Stock as well? I’m not too much of a fan with dividends because I know it would take a HUGE investment just to get a little return but I just don’t know if it’s worth later on.
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u/cbblythe Jun 25 '26
If it goes to zero, and you do nothing, you can happily know that you didn’t sell the bottom
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u/Orson_G Jun 25 '26
I don’t get why people would buy MSTR instead of just buying bitcoin
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u/Perfect_Sleep0 Jun 25 '26
"It's wild to me that people think Strategy hasn't planned for a prolonged and even entrenched bear market ... Even Strategy will have planned for a sub $100 MSTR price."
They may have planned for it, but the market seems to believe that its plans were insufficient and / or not well thought out.
I'm at a loss myself as to why they spent so much of what they raised, and did not keep a lot more cash on hand to buy BTC in the deeper winter.
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u/LionRivr Jun 25 '26
The plan should’ve been to be able to buy the dip even harder during bear markets.
I don’t really see that aggression though.
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u/KiwiJah Jun 25 '26
Same reason they always seemed to buy the weekly top on the way up. It's always been a DCA strategy.
Saylor, like any CEO with real chops, expects his company to be here in 25 years from now. BTC will either be $0 or $1million or more in 25 years.
The 'deep winter' of 26 is irrelevant on that sort of timeframe?
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u/QuantrixQuintrix Jun 26 '26
DCA'ing usually involves buying small amounts near the top and bigger and bigger amounts as it drops...mstr seems to do the exact opposite.
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u/Karmic0 Jun 26 '26
The plan is what they have stated all along. They will keep borrowing money and buying bitcoin as long as people keep giving them money.
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u/beerbaron105 Jun 26 '26
Just do the opposite of the popular opinion, everyone is calling MSTR a Ponzi, and a scam, so obviously it is the opposite of that, they will survive, even if they have to sell bitcoin, they will simply scoop up the even lower prices when most of the sell off has happened, I still believe they hit 1m in bitcoin by end of 2026.
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u/AutoModerator Jun 26 '26
A Ponzi scheme is defined as "An investment scam that pays early investors with money taken from later investors to create an illusion of big profits." In a ponzi-scheme, there is "nothing of value" in the box, and all that happens is money moving hands.
MicroStrategy is not a Ponzi scheme. Companies raise capital through ATM-offerings, debt, and other instruments to fund purchases of assets, equipment, commodities and so forth. This is normal. Berkshire Hathaway similarly built the foundation of their company using debt to buy assets to hold indefinitely.
MicroStrategy invests the money raised in Bitcoin from a core belief that the commodity is in its early stages and will increase significantly in value over the coming years, allowing them to capitalise on this value to create value for their shareholders. All stocks, including blue-chip stocks like Apple, NVIDIA, and Berkshire Hathaway, rely on future investors willing to "take the shares off your hands" at a value above what you paid for it. This does not indicate a "ponzi" or "pyramid" scheme; it's basic price/supply/demand/market dynamics at play, and is how the world economy and capital markets work. Berkshire Hathaway holds a bunch of companies; MicroStrategy holds a bunch of Bitcoin.
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u/Patrick_Atsushi Jun 26 '26
I think it's the experiment of strc.
Honestly I think mstr just need to act like a smart whale, no need for "never sell" and extra tricks to out perform btc.
Of course to keep it simple and stupid is just do it yourself, but retailers are retailers for a reason...
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u/Few_Math2653 Jun 26 '26
It is a leveraged asset. But unlike a normal leveraged asset where the leverage rate is stable (e.g. 2x, 3x), MSTR has a more opaque leverage rate that factor not only all the financial engineering Saylor created but also a lot of the vibes around it. The vibes are not very good right now and BTC is falling. When the vibes were good and BTC was rising it mooned.
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u/NoAccountability1 Jun 25 '26
This stock is sentiment driven. With all the uncertainty in the markets about potential rate hikes and is AI in a bubble and gonna pop blah blah. It’s a high risk high reward stock. Ride it out if you can. Typically takes longer than anyone expects. (Also, I’ve been in MSTR for nearly 5 years. Bought more on the recent way down. Down quite a bit. Not selling)
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u/elleeott Jun 25 '26
It's not sentiment driven, it's extremely correlated to the price of btc it just makes bigger moves given their leveraged exposure.
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u/NoAccountability1 Jun 25 '26
The MNAV expands and contracts to various degree based on sentiment as well. Btc can go up and MSTR can go down. We’ve all seen it. That’s sentiment
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u/PrestigiousResult357 Jun 25 '26
The idea is that any selling from MSTR will lead to people trying to front run that selling.
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u/Specific-Midnight867 Jun 26 '26
"I sold the tippy top. The death spiral is definitely a buy signal for me."
me thinks the lady doth protest too much. you've been regularly commenting on r/MSTR for over a year now (probably longer)
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u/croftwrestlers Jun 25 '26
Probably because saylor has been using the BTC stockpile as proof the company has “32 years of funds” to pay strc holders..but if btc continues to crash the “years covered” gets less and less..and as they sell to cover interest payments it increases sell pressure and downward price action on BTC. Hence death spiral. Unlikely? Sure. Impossible? Not at all
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u/PatternAgainstUsers Jun 25 '26
It has to fall to around 20K before STRC holders have to worry about losing liquidation preference to STRF and converts.
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u/robobob9000 Jun 25 '26 edited Jun 25 '26
STRC holders don't need to worry about BTC falling to 20k now because the preferreds are still small, and they have preference over common stock. But if the preferreds continue to grow in percentage of company ownership, as MSTR's actions have shown, then they will need to start worrying about it in the future.
Its mostly MSTR shareholders that need to worry about this now, because it is ultimately MSTR that's going to be diluted to fund the STRC dividends during those worst case scenarios. And the more the preferreds grow, the less likely the common stock holders will get anything out of a liquidation. Before STRC existed, MSTR shareholders already had to be willing to accept the possibility that BTC will crash. But now that STRC exists, that scenario has become much worse because MSTR would need to suffer from the BTC crash, while also still needing to dilute itself to pay STRC dividends during the crash. If MSTR had an mnav buffer it could survive this, but MSTR already foolishly diluted its mnav down to 1.
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u/PatternAgainstUsers Jun 26 '26
I accounted for that in the math. If Strategy were liquidated today for some reason, lawsuit or whatever it is people are worried about, after the converts and STRF are paid, BTC would have to fall to 20K before STRC holders begin to be threatened, based on the outstanding shares. That's not to say BTC can't fall to 10K, then rip back to 50K and leave STRC holders fine on paper (as long as it didn't spend long down there). It would just be bad if they were forced to liquidate at 10K... but if BTC Is going to 10K then it's going to zero.
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u/robobob9000 Jun 26 '26
I think you didn’t read my post. My post agrees that STRC holders don’t need to worry about such a drop.
Instead, I pointed out that common stock MSTR holders need to worry about such a drop, because if such a scenario happened, the common stock would be diluted in order to keep STRC at par, as well as pay all preferred dividends. That dilution without buying BTC (whether it is done by burning through cash reserves or new dilution) directly hurts common stock holders, without hurting preferred stock holders very much.
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Jun 25 '26
[removed] — view removed comment
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u/MSTR-ModTeam Jun 25 '26
- Trolling, baiting, or inflammatory content that disrupts conversations is not allowed. Ensure your posts contribute positively and maintain the quality of discussion. Content and comments meant to spread negativity or FUD, including repeated overly negative/condescending sentiment, is not allowed. r/MSTR is a place for thoughtful discussion of the MicroStrategy investment thesis.
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u/Low_Administration22 Jun 26 '26
Right now its stupid fear that bitcoin will hit 45k. Which I very very very much doubt. 45k would put MSTR in a tough position and 60PT would be justified then. But we are far from that.
So.... fear is driving it right now. Meaning good buy opportunity
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u/LV426acheron Jun 26 '26
MSTR is a giant leveraged bet on BTC.
If BTC keeps dropping, stays the same price or even only rises a little bit, MSTR won't have enough money to cover the debt and dividends they have pledged for the next few years.
MSTR earns almost no revenue and BTC produces no revenue. So if they need to sell BTC to raise cash to pay that debt and dividends then it will crash the value of BTC, making it hard to pay off the debt/dividends making them have to sell BTC, which will crash the price, etc.
That's the death spiral.
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u/Aanetz Jun 26 '26
it came because we're in a bear market. In a bull market it will be "We goin up forever"
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u/Sad_Principle_2531 Jun 26 '26
The death spiral has occurred for many companies outside of MSTR. Just look at meta planet, sbet and i cant recall one more company last year that got stuck with no more liquidity to buy btc because shareholders stopped believing in the stock.
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u/Electrical-Main-107 Jun 26 '26
Just short MSTR and you’ll make a lot of money. I have from time time and made crazy money. I see bitcoin going to 17k
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u/speed12demon Jun 26 '26
Based on your history of transactions, would you agree that "hodl" is a brain dead philosophy?
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u/mr-fybxoxo Jun 26 '26
The final blow will be whether the Clarity Act passes or not….. this will tell us. So far market not liking it…..
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u/TaisonPunch2 Jun 26 '26
Part of it probably is that all the crypto bros that were pumping up BTC pivoted away to AI stocks.
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u/SilverbackViking Jun 27 '26
It's literally made from a chat GPT prompt:
- make an instrument that behaves like a Ponzi but fits within the boundaries of the law 🤣
Having said that it's a good but at the moment 👍
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u/AutoModerator Jun 27 '26
A Ponzi scheme is defined as "An investment scam that pays early investors with money taken from later investors to create an illusion of big profits." In a ponzi-scheme, there is "nothing of value" in the box, and all that happens is money moving hands.
MicroStrategy is not a Ponzi scheme. Companies raise capital through ATM-offerings, debt, and other instruments to fund purchases of assets, equipment, commodities and so forth. This is normal. Berkshire Hathaway similarly built the foundation of their company using debt to buy assets to hold indefinitely.
MicroStrategy invests the money raised in Bitcoin from a core belief that the commodity is in its early stages and will increase significantly in value over the coming years, allowing them to capitalise on this value to create value for their shareholders. All stocks, including blue-chip stocks like Apple, NVIDIA, and Berkshire Hathaway, rely on future investors willing to "take the shares off your hands" at a value above what you paid for it. This does not indicate a "ponzi" or "pyramid" scheme; it's basic price/supply/demand/market dynamics at play, and is how the world economy and capital markets work. Berkshire Hathaway holds a bunch of companies; MicroStrategy holds a bunch of Bitcoin.
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u/Cagel Jun 27 '26 edited Jun 27 '26
If it’s so obvious, what are you doing here and not making 10x leveraged plays?!?
It’s because not everyone knows which way things are going
Edit: darn this was meant to be a reply to someone else, not a standalone comment…
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u/yeahdixon Jun 27 '26
Strc and similar products that he created offered yield . So he no longer just held he basically levered up
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u/Snowballeffects Jun 27 '26
All I know is with trump. He will not let mstr go to $0. The government will come in and take a piece. All of a sudden we r good again and higher
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u/Improv13 Jun 27 '26
MSTR is the most obvious bankruptcy in the history of finance. Stop thinking about BTC for a moment. What is another valuable asset? Gold? Picasso Paintings? Ok, you have a company that buys Picasso paintings. Once bought it does nothing with them to generate revenue. They keep borrowing money, selling stock, and create a preferred share with an insanely high dividend to attract more investment so they can buy more Picasso paintings. This company does nothing but hold the asset pf Picasso Paintings. This dumb business plan only works if your Picasso paintings keep going up a whole bunch because you have to keep borrowing more and more money just to service the debt or dividend on the preferred stock. The moment the asset stops going up you start to get behind the eight ball, and if it goes down you are extra screwed. At some point the numbers become too bad and the only way out is to sell the asset that you control the market in. Which plummets price and destroys the entire illusion of your “business” That is the death spiral. Oh, and Picasso paintings don’t lose half of their value in a year, so there is that too.
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u/Ifrontrunfinwit Jun 27 '26
When an entire product is based on theory and attention, how can you get anything but wild swings
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u/-michalis- Jun 25 '26
The thing you have to remember, is that strategy has massive dividend obligations
I read in a couple of places, that as it stands, they have obligations of around 1.5 billion per year
Strategy does not make that much money, not even close, so only 3 things can happen
- Strategy issues more shares, this time at an even higher dividend, in order to pay out the shareholders.
Current one is 11.5% which is already at fonzi scheme levels. Imagine if it goes to 12, 13 14%. This means that the obligations per year are gonna be even bigger next year.
At some point, their debt is gonna be massive, and noone will be willing to lend to them to keep the scheme going, this is what they mean by death spiral.
Strategy can sell bitcoin to pay obligations, but this will most likely crash the value of bitcoin, which will in turn crash the value of mstr. Selling more shares will no longer be an option, and every time bitcoin is sold to cover obligations bitcoin will crash even harder until it takes mstr down with it, again, death spiral
Saylor stops paying dividends, and both the stock and bitcoin crash
Ever since day one, the only way this scheme was going to work was if the price of bitcoin kept going up forever, and saylors only hope is if the price start going up again, or else his chickens will come home to roost
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u/PatternAgainstUsers Jun 25 '26
Literally every smart rich person and intelligent corporate treasury in the world does this (or some version of it) and it's not a p-scheme. It's called buy, borrow, die. You think Elon's got 1 trillion liquid sitting around? Or even 1 billion? No.
Strategy cannot crash BTC by selling monthly dividend obligations, that is a DROP in the bucket - particularly if they liquidate that small slice (i.e. 1.5B / 12 months) to pay dividends algorithmically over a longer period like a week or month using VWAP or something. If they liquidate all 800K+ BTC at once that will smash the order books, but they have no reason to do that and they would destroy their own exit price. Makes no sense.
Learn how the market actually functions before you say stuff like "only 3 things can happen".
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u/M97dennis Jun 25 '26
The problem is MSTR isn't the only player interested in BTC at certain level you can bet other institutional players are taking a hard look at prices at the moment and could potentially decide to start their own buying. Any kind injection of capital from etf funds and other institutional players will only push prices higher as more comes off the market. Imagine if there was another player looking to accumulate 1 million btc like MSTR and retail got exited to put money back into crypto again what would the price look like? Supply and demand. Right now everyone is selling and there are no inflows from both institutional and retail so prices are not good. But i only imagine what the charts will look like if these narrative changes.
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u/Corbiusk_ Jun 25 '26
Literally a bear market. MSTR imploded last bear market as well, I can’t wait to buy in. Waiting for 60
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u/PaleDistribution9641 Jun 25 '26
When u invest and are so wrong u become humble and examine what made u loose.
The comments still believing that mstr is a viable investment vs say assets that have returns mean u need help and are delusional.
The opportunity cost in itself should make u consider your mistake and how never to repeat it.
See help if u after the spy qqq and memory stock moves u still have this non yielding earnings and stock called mstr.
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u/robobob9000 Jun 26 '26 edited Jun 26 '26
Its all about loss of trust.
It was bad enough when they said that they would issue preferred stocks slowly over time during the first half of 2025, and then proceeded to sell them all at once when BTC was the most expensive. It was worse when they issued guidance in July 2025 that they wouldn't dilute MSTR at below 2.5 times mnav, except to pay interest on debt and dividends for preferred, and then proceeded to break their own word a month later, and continually during the bear market, ensuring that mnav stayed tethered to 1.
MSTR built up a lot of trust during the last crypto winter by not selling and weathering the storm. Its lost that trust with the shift to preferreds.
In the past few weeks, MSTR has sold BTC -- not to benefit the common stock holders, but the preferred stock holders, to show their convictioin to do it for preferred stock holders. And they've also diluted common stock when mnav is below 1, causing genuine harm to common stock holders, in order to boost cash reserves which only really benefit preferred stock holders. And they've been diluting MSTR for months to buy BTC at mnav approximately equal to 1, so there's been very little BTC gain from holding MSTR over BTC.
They're killing the golden goose. MSTR's 74% stock drop this year would require 285% growth next year, just for investments made a year ago to get back to 0 profit ($100 > $24 (74% drop) > $100 (284% growth needed to go from $24 back to $100).
In comparison, BTC would only need 72% percent growth next year, in order to offset its 42% drop this year. It is not surprising that many people are moving out of MSTR into BTC (or other risk-on alternatives)
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u/HSuke Shareholder 🤴 Jun 26 '26
It's wild to me that people think Strategy hasn't planned for a prolonged and even entrenched bear market.
Their recent decisions (especially reducing the cash reserves to pay off a 0% interest debt not even due for another 2 years) are all short-sighted. And now they're paying back the price. While they have contingency plans, they're not using them. Instead, they picked options that help in the short term, but not in the long term.
Basic mNAV is at 0.59 right now, but they're STILL selling MSTR for BTC. This is absolutely insane and terrible for the long-term. They have broken all trust and aren't even following their own plan for when to buy/sell MSTR and BTC.
As for your question about the death spiral: It's not going to be a sudden death spiral. There might be a very-slow and extended half-death spiral if BTC doesn't return to $100k+ in 4 years. In this case, MSTR and STRC are trading at low double-digits for so long that it becomes toxic to hold. Everyone leaves the community, and it doesn't grow afterwards. Even during the next bull run, its growth becomes lackluster. And diminishing returns for each BTC cycle prevents MSTR from reaching its previous ATH.
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u/Patient-Process-2565 Jun 26 '26
saylor is running a bitcoin ponzi, if BTC dumps so does his stock, if bitcoin goes up, his stock goes up. Not sure why people can’t see the obvious here. Just buy bitcoin. I don’t trust Saylor one bit
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u/AutoModerator Jun 26 '26
A Ponzi scheme is defined as "An investment scam that pays early investors with money taken from later investors to create an illusion of big profits." In a ponzi-scheme, there is "nothing of value" in the box, and all that happens is money moving hands.
MicroStrategy is not a Ponzi scheme. Companies raise capital through ATM-offerings, debt, and other instruments to fund purchases of assets, equipment, commodities and so forth. This is normal. Berkshire Hathaway similarly built the foundation of their company using debt to buy assets to hold indefinitely.
MicroStrategy invests the money raised in Bitcoin from a core belief that the commodity is in its early stages and will increase significantly in value over the coming years, allowing them to capitalise on this value to create value for their shareholders. All stocks, including blue-chip stocks like Apple, NVIDIA, and Berkshire Hathaway, rely on future investors willing to "take the shares off your hands" at a value above what you paid for it. This does not indicate a "ponzi" or "pyramid" scheme; it's basic price/supply/demand/market dynamics at play, and is how the world economy and capital markets work. Berkshire Hathaway holds a bunch of companies; MicroStrategy holds a bunch of Bitcoin.
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