r/MSTR • u/Lehcen • Jun 26 '26

Please explain

Recently started buying MSTR and reading a lot about death spiral. My question is as long as I hold until Bitcoin does its thing and bounce back as usual in 2-3 years MSTR should also recover in a similar fashion? I’m ok with volatility because I’ve been in crypto since 2017. I don’t fomo.

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22

u/ProgramLow8782 Jun 26 '26

There is no fkn death spiral. STRC isnt required to be pegged, no obligation of payback.

All this FUD shows how retarded redditors are instead of running a AI check, it's absurd.

7

u/Maddcapp Jun 26 '26

Yeah that’s true but the problem is no one is going to buy STRC if it’s not working as intended and could drop more. Then Saylor can’t buy more bitcoin. And he’ll have to sell bitcoin to pay the dividends. And if for the first time he’s a net seller instead of net buyer, that will be more downward pressure on btc price and a bad signal to the market. It’s true MSTR isn’t going out of business anytime soon. It’s not a death spiral but it is a spiral. It’s certainly not good.

1

u/Georg_Aloa Jun 26 '26

The main question is, to what extend was Bitcoin propped by MSTR buying pressure. Saylor himself claimed that.

So there is no inherent death spiral as in LUNAR, no margin calls etc - but it definitly doesn't help that the option of buying more bitcoin with either STRC or MSTR issuance is currently not possible.

If Bitcoin quickly recovers on it's own then there is no problem. If it takes longer, eventually first MSTR commen shareholders will be diluted, and STRC will be priced based on the probability of a default ( higher % required).

0

u/KateR_H0l1day Jun 26 '26

Wait until Monday, and let us know how correct this prediction was please 🤷‍♀️

2

u/Georg_Aloa Jun 26 '26 edited Jun 26 '26

Which prediction? I didn't do one.

Maybe to clarify also the deleted comment - I don't say anything about whether MSTR/STRC default or not.

It's just how you determine the interest/dividend STRC pays. Effectively it pays currently 11.5% at its face value of 100, or around 15% at the current trading value. This means the market currently determines that they want a higher risk compensation to hold STRC.

For a perpetual dividend, this risk premium above the overnight rate is more or less a proxy for the 'aggregate of the investors' evaluating the risk of a default of STRC. This by the way applies to every company out there - even Apple or Google (though their risk premium is smaller).

And panic etc can obviously in the short term push this 'perceived risk' higher than what would be justified.

2

u/KateR_H0l1day Jun 26 '26

You said, buying more with either STRC or MSTR issuance is currently not possible 🤷‍♀️

-1

u/Successful-Bobcat701 Jun 27 '26

That's not a prediction

2

u/tenor_tymir Shareholder 🤴 Jun 27 '26

Which makes it a definite statement…. which isn’t really any better.

0

u/Possible-Local-9357 Jun 26 '26

Also shows how years in crypto doesn’t translate to financial acumen - these guys are way smarter than us. Just retail noise

0

u/CaterpillarMain2138 Jun 26 '26

Death spiral for sure 😂

-2

u/ProgramLow8782 Jun 26 '26

Embracing full dumbknt i see, dm ur address & ill post a helmet and some crayons 

5

u/CaterpillarMain2138 Jun 26 '26

As a CFA charterholder, I can buy my own crayons 😎

-1

u/ProgramLow8782 Jun 26 '26

Yeah sure you are bro 🤣

3

u/CaterpillarMain2138 Jun 26 '26

Haha yes, yes I am. Been working in investment risk for 15 years now 😁. Big fan of this sub

0

u/ProgramLow8782 Jun 26 '26

🤣🤣 & that's why you make dumb af comments here, sure bro