Nearly $3 billion in Bitcoin and Ethereum options contracts are set to expire on Friday, potentially triggering short-term volatility and influencing market sentiment. Traders should prepare for possible price swings and increased market activity. Approximately $3 billion worth of Bitcoin (BTC) and Ethereum (ETH) options contracts are expiring before the start of the weekend. This significant event could lead to heightened volatility, as options expirations often result in increased trading activity and rapid price movements. With Bitcoin trading around $102,871 and Ethereum at $2,309, investors are closely watching for possible market shifts. Key technical points, Options Expiry Volume: Approximately $3 billion in BTC and ETH options are expiring today, potentially leading to increased market volatility. Market Sentiment Indicators: The put-to-call ratios for Bitcoin and Ethereum suggest mixed market sentiments, with Ethereum showing a slightly more bullish outlook. Potential Price Movements: Traders anticipate possible price swings and increased market activity as a result of the options expiry. Options contracts allow traders to buy or sell an asset at a predetermined price before a specific date. The expiration of these contracts frequently sparks repositioning, leading to increased activity and short-term volatility. The sheer size of Friday’s expiry could influence near-term price dynamics. Bitcoin Open Interest by Strike, Source: Deribit The put-to-call ratio is a common metric used to gauge market sentiment. A ratio above 1 indicates a bearish sentiment, while a ratio below 1 suggests bullishness. Current data shows Bitcoin’s put-to-call ratio at 0.93, indicating a neutral to slightly bullish sentiment, whereas Ethereum’s ratio stands at 1.22, reflecting a more bearish outlook. Ethereum Open Interest by Strike, Source: Deribit Analysts have mixed views on the impact of today’s options expiry. Some believe it could lead to short-term volatility and influence market sentiment, potentially driving prices higher if the prevailing sentiment is bullish. Others view it as a routine event with limited long-term impact, suggesting that while price swings may occur, broader factors such as regulatory developments and macroeconomic conditions will continue to play a significant role in market trends. What to expect in the market post-expiry Following the expiration of these options contracts, traders should be prepared for potential short-term volatility as the market adjusts. If bullish sentiment prevails, we could see upward price movements, particularly if key resistance levels are breached. Conversely, if bearish sentiment dominates, prices may face downward pressure. It’s essential for traders to monitor market indicators and news closely, as external factors like regulatory changes and macroeconomic developments could also influence market direction in the coming days.
Some $777 million worth of shorts have been smashed in the last day, with Ethereum doing the most damage as it rises alongside Bitcoin.
Summary Antalpha Platform Holding Company seeks to raise $46.2 million in an IPO, providing supply chain financing in the Bitcoin mining machine industry. The firm shows strong revenue growth and profitability but has high valuation expectations and significant concentration risks. Despite positive industry growth dynamics, Antalpha's exposure to Bitcoin volatility and regulatory unpredictability warrants a cautious 'neutral Hold' rating. Investors bullish on Bitcoin may find the ANTA IPO appealing, but I'll be watching for a lower entry point post-IPO. A Quick Take On Antalpha Platform's IPO Antalpha Platform Holding Company ( ANTA ) has filed to raise $46.2 million in an IPO of its ordinary shares, according to SEC F-1/A registration information . ANTA provides supply chain financing in the Bitcoin mining machine industry. The firm has produced strong recent topline revenue growth and has turned a profit, but valuation expectations are very high and the firm has numerous and widespread concentration and other risks. I’m a neutral Hold on the ANTA IPO as I watch for a lower entry point post-IPO, although "risk on" investors who are positive on the wider Bitcoin complex may have a more bullish outlook. What Does Antalpha Do? Singapore-based Antalpha Platform Holding Company was founded to enable companies to expand their Bitcoin mining scale and operations to purchase Bitcoin mining machines from partner Bitmain and other equipment suppliers. Management is led by founder, Chairman and CEO Mr. Moore Xin Jin, who has been with the firm since its inception in 2021 and was previously general manager of Diansuan Information Technology, a software provider for online shopping and mining machine distribution and management services. The firm was previously a sister company of financing firm Northstar and with which it has a continuing relationship, which it recognizes revenue it calls "technology platform fees," which are essentially loan servicing fees, that currently account for about 18.5% of its total revenue. Antalpha has booked fair market value investment of $48.6 million as of December 31, 2024 from investors, including Antalpha Technologies Holding Company, AMT Integrated Fund and Will Chang-Wei Chiu. Sales and Marketing expenses as a percentage of total revenue have fallen materially as revenues have increased quickly, as the figures below indicate: Sales and Marketing Expenses vs. Revenue Period Percentage Year Ended Dec. 31, 2024 9.0% Year Ended Dec. 31, 2023 23.5% (Source - SEC.) The Sales and Marketing efficiency multiple, defined as how many dollars of additional new revenue are generated by each dollar of Sales and Marketing expense, was a robust 8.5x in the most recent reporting period. (Source - SEC.) What Is Antalpha’s Market? According to a 2025 market research report by Verified Market Research, the global market for ASIC Bitcoin mining machines was an estimated $9.2 billion in 2024 and is expected to exceed $26.7 billion by 2031. This represents a forecast CAGR (Compound Annual Growth Rate) of strong CAGR of 22.3% from 2025 to 2031. The primary factors driving this expected growth are the increasing usage and price of Bitcoin worldwide, driving up potential mining block rewards despite the reward halving approximately every four years. Also, the chart below illustrates the expected trajectory of the Bitcoin mining hardware market through 2031: Verified Market Research Major competitive vendors or industry players include the following firms: DigMig Innosilicon HashFast Technologies BTCGarden Biostar Group Spondoolies-Tech Ltd. Grdichip BitDragofly Antminer Ebang BitFury Group Black Arrow CoinTerra Butterfly Labs Others. The company sources supply chain financing customers via its relationship with Bitcoin mining company Bitmain. It also provides technology and loan servicing services to Northstar for non-U.S. loans by Northstar. I’ve prepared a thumbnail SWOT analysis for Antalpha: Strengths Bitcoin mining ecosystem expertise, strategic relationships with large industry players, asset light business model. Weaknesses Exposure to volatile Bitcoin industry, close ties to two entities - Bitmain and Northstar, concentrated portfolio and funding sources. Opportunities Growing digital mining market, expansion into AI GPU markets and new geographies. Threats Unpredictable regulatory environment in various jurisdictions, Bitcoin mining economic return variability, cybersecurity risks. Antalpha’s Recent Financial Results The firm’s recent financial performance is summarized as shown below: Sharply growing topline revenue Increasing gross profit and gross margin A swing to operating profit Reduced cash used in operations. Below are major financial results from the firm’s current registration statement: Total Revenue Period Total Revenue % Variance vs. Prior Year Ended Dec. 31, 2024 $ 47,454,993 321.0% Year Ended Dec. 31, 2023 $ 11,272,995 Gross Profit (Loss) Period Gross Profit (Loss) % Variance vs. Prior Year Ended Dec. 31, 2024 $ 22,837,628 359.4% Year Ended Dec. 31, 2023 $ 4,970,744 Gross Margin Period Gross Margin % Variance vs. Prior Year Ended Dec. 31, 2024 48.12% 9.1% Year Ended Dec. 31, 2023 44.09% Operating Profit (Loss) Period Operating Profit (Loss) Operating Margin Year Ended Dec. 31, 2024 $ 3,181,081 6.7% Year Ended Dec. 31, 2023 $ (7,622,347) -67.6% Net Income (Loss) Period Net Income (Loss) Net Margin Year Ended Dec. 31, 2024 $ 4,393,471 9.3% Year Ended Dec. 31, 2023 $ 6,585,440 58.4% Cash Flow From Operations Period Cash Flow From Operations Year Ended Dec. 31, 2024 $ (11,694,058) Year Ended Dec. 31, 2023 $ (12,239,995) (Glossary Of Terms.) (Source - SEC.) As of December 31, 2024, Antalpha had $6.9 million in cash and $1.2 billion in total liabilities. The company has generated free cash flow for the twelve months ended December 31, 2024, of negative ($11.9 million). Antalpha’s IPO Plan ANTA intends to sell 3.85 million shares of ordinary shares at a proposed midpoint price of $12.00 per share for gross proceeds of approximately $46.2 million, not including the sale of customary underwriter options. Tether International, the operator of the largest USD stablecoin network ( USDT-USD ), has indicated a non-binding interest in purchasing shares of up to $25 million from the IPO and on the same terms. Dilution in net tangible book value per share for investors in the IPO is expected to be $8.32, which is within the typical range for a company at IPO. The company’s enterprise value at IPO (excluding underwriter options) will approximate $638 million. The float-to-outstanding-shares ratio (excluding underwriter options) will be approximately 16.7%. Per the firm’s most recent regulatory filing, it plans to use the net proceeds as follows: We plan to use the net proceeds of this offering primarily for: general corporate purposes, which may include investment in product development, sales and marketing activities, technology infrastructure, capital expenditure, global expansion, and other general and administrative matters; loan operation and customer funding advance needs, to accelerate our fund flow and improve customer experience; investment in technologies, solutions or businesses that complement our business, although we have no present commitments or agreements to enter into any acquisition or investment; and investment in Bitcoin and gold (in digital form) as part of our treasury management. (Source - SEC.) Management’s presentation of the company roadshow is not available. Pertaining to potential legal exposure, leadership says the firm is presently not a party to any legal actions that it considers 'material.' Listed underwriters of the IPO are Roth Capital Partners and Compass Point. Below is a table of relevant capitalization and valuation figures for the company: Measure [TTM] Amount Market Capitalization at IPO $277,200,000 Enterprise Value $638,160,362 Price / Sales 5.84 EV / Revenue 13.45 EV / EBITDA 110.21 Earnings Per Share $0.19 Operating Margin 6.70% Net Margin 9.26% Float To Outstanding Shares Ratio 16.67% SBC as Percentage of Free Cash Flow -1% Dilution to New Shareholders $8.32 Revenue Growth Rate 320.96% (Glossary Of Terms.) (Source - SEC.) Antalpha Is Growing Quickly And Profitably ANTA wants to access U.S. capital markets to fund its growth and expansion plans, and to purchase Bitcoin or tokenized gold digital assets for its treasury strategy. The firm’s financials have generated quickly growing topline revenue, growing gross profit and gross margin, a swing to operating profit and lower cash used in operations. However, free cash flow for the twelve months ended December 31, 2024, was negative ($11.9 million). Sales and Marketing expenses as a percentage of total revenue have fallen quickly as revenue has grown and its Sales and Marketing efficiency multiple was a strong 8.5x in the most recent reporting period. The firm currently plans to pay no dividends and will likely retain any future earnings for its growth and working capital needs. ANTA’s recent capital spending history indicates it has spent lightly on capital expenditures despite generating negative operating cash flow. The firm’s growth strategy features a desire to diversify its funding sources, expand its client base beyond traditional Bitcoin miners to corporates and family offices, and explore offering financing for AI compute GPU purchases. The market opportunity for the Bitcoin mining ecosystem is large and expected to grow at a very strong rate of growth through 2031, so the company has positive industry growth dynamics in its favor. Risks to the company’s outlook as a public company include its "foreign private issuer" and "emerging growth company" status, which allows management to produce less information for shareholders. Many of these types of stocks have performed poorly post-IPO. ANTA has several concentration risks, including customer and loan concentration, geographic concentration in the U.S. and Asia, funding source concentration with Northstar, product concentration with only providing financing for Bitmain brand mining machines and collateral concentration. In its history, Antalpha was a wholly-owned subsidiary before it was carved out of Northstar. In late 2024, Northstar agreed to provide ANTA with a credit facility of up to $1.0 billion, with an accordion feature to increase to up to $1.15 billion per year. Northstar is a Hong Kong-based entity that is not a regulated or registered financial institution, but is an irrevocable trust with the beneficiary of Mr. Ketuan Zhan, co-founder of Bitmain, and is essentially a private capital provider that facilitates Bitmain’s financing options. Management is seeking an Enterprise Value/Revenue multiple of approximately 110x and an EX/Sales multiple of 13.5x on very high revenue growth but extremely uneven net margin, which was 58.4% in 2023 and 9.3% in 2024. The company is exposed to a volatile industry and prospective investors should think of Antalpha as essentially within the greater "Bitcoin complex" and subject to Bitcoin’s frequent, though lessening over time, volatility. Also, it is subject to a variety of unpredictable regulatory changes, including the Hong Kong domicile of its primary source of funds, Northstar. Antalpha’s outstanding loan balance at the end of 2024 was $428.9 million out of a $1 billion credit facility. It also generates revenue from servicing Northstar loans to non-US customers. If Northstar were to be prohibited or hindered from providing financing to Antalpha, it could severely disrupt Antalpha’s ability to generate revenue. So, while ANTA is growing quickly and profitably, there are material risks to investors from a variety of vectors described above. For investors who are bullish on the Bitcoin space in general and are willing to stomach the risks of a Bitcoin-adjacent company like Antalpha, the IPO may be worth a close look. However, I'm a bit more cautious due to its ultra-high EV/EBITDA valuation expectations given its fluctuating margin and its various concentration risks, as I outlined above. As a result, I'm a neutral Hold on the ANTA IPO on valuation and risk concerns, although I’ll be watching it closely in post-IPO trading for a potentially lower entry point. Expected IPO Pricing Date: May 12, 2025.
Brazil’s main stock exchange, B3, will begin offering Ethereum and Solana futures contracts on June 16, expanding its crypto derivatives lineup beyond Bitcoin. The move comes after approval from the Brazilian Securities and Exchange Commission and is part of a broader push to make digital asset investment more accessible to institutional and retail players. Unlike the existing Bitcoin ( BTC ) futures, which are priced in Brazilian reais, the new Ethereum ( ETH ) and Solana ( SOL ) contracts will be denominated in U.S. dollars. The Ethereum contract will be based on 0.25 ETH and the Solana contract on 5 SOL. Both will use Nasdaq’s reference indices and settle financially on the last Friday of each month, according to a company note. You might also like: Celsius founder Alex Mashinsky sentenced for 12 years in prison for stealing $48M Regulated alternatives The launch responds to increasing demand for diversified crypto instruments, according to B3’s Product Director Marcos Skistymas, who emphasized the goal of offering “regulated and secure” alternatives tied to blockchain assets. In addition to launching new contracts, B3 is also reducing the size of its Bitcoin futures, the company said. Previously set at 0.1 BTC, each contract will now represent 0.01 BTC starting June 16. The change is intended to improve accessibility, increase liquidity, and lower trading barriers. This move follows B3’s recent debut of the world’s first spot XRP ETF, further establishing the exchange as a leader in regulated crypto investment products. Currently, B3 hosts nine crypto ETFs managed by Hashdex. You might also like: Gate.io releases proof of reserves report: $10.865b total reserves, $2.415b in excess
Pi Network price surged in a high-volume environment on Friday, mirroring the broader crypto market rally driven by Bitcoin and major altcoins. Pi Coin ( PI ) token surged to an intraday high of $0.78 on Friday, its highest point since April 12, and 41% above its lowest level this month. The 24-hour volume soared by 170% to $353 million. Two broader factors drove this rally. First, it surged as Bitcoin ( BTC ) and most altcoins soared, pushing the total crypto market cap to over $3.25 trillion. This surge was because of the ongoing Bitcoin accumulation and the rising hopes of trade deals between the US and other countries. Second, the Pi Network community is anticipating a major ecosystem announcement next week. The timing aligns with the Consensus event in Toronto, where Pi Network’s founder Nikkolas Kokkalis is scheduled to speak. A Pi ecosystem announcement will be released on May 14. Tune in to find out what's coming next! pic.twitter.com/5jn7m5mlmD — Pi Network (@PiCoreTeam) May 7, 2025 This announcement could be a partnership with a large company, an ecosystem fund to incentivize developers, an exchange listing, or a token burn. Rumors of a token burn gained traction after on-chain data revealed a transfer of 84 million PI tokens to an unspecified address. Some analysts suggest these tokens may have been moved to provide liquidity for a potential exchange listing. You might also like: Is Binance listing Pi Network soon? Wallet activity sparks rumors ahead of planned May 14 ecosystem update A tier-1 exchange listing could serve as a major bullish catalyst. For example, the Pudgy Penguins ( PENGU ) price jumped by double digits on Friday after it was listed on Upbit, a top South Korean exchange. A token burn would also lead to a parabolic move because it would offset the ongoing token unlocks. Data shows that over 1.45 billion Pi coins will be unlocked in the next twelve months, diluting existing holders. These unlocks have led to higher supplies and contributed to the recent crash. Pi Network price analysis Pi price chart | Source: crypto.news The ongoing Pi Coin price surge is in line with what we predicted here and here . In those articles, we pointed to the narrowing spread of the three Bollinger Bands lines, and that it was in the accumulation phase of the Wyckoff Theory. On the 8-hour chart, Pi Coin bottomed at $0.5577 on April 29 before rallying to $0.7810 on Friday. This pattern has formed a cup-and-handle structure, a widely followed bullish continuation pattern. The depth of the cup is approximately 30%. A measured move from the breakout point suggests a potential upside target of $1.10, a 41% rally from current levels. This move could materialize ahead of the expected announcement on May 14. You might also like: A 90-year-old theory suggests the Pi Network price may surge soon
Cardano makes initial reversal but true test lies ahead
While Bitcoin (BTC), Ethereum (ETH) and altcoins have experienced major increases in the last two days, Real Vision co-founder and CEO Raoul Pal made new statements about the altcoin season. Raoul Pal argued that an altcoin rally could be very close, stating that Bitcoin dominance, which is the biggest obstacle for altcoins, has reached its peak. Macro analyst Pal, in his post from the X account, stated that Bitcoin dominance has probably reached its peak, with DeMark indicators indicating peaks for BTC dominance on daily, weekly and monthly charts. Noting that the current BTC.D level is lower than the 2021 and 2017 peaks, Pal stated that this is in line with past historical patterns. He argued that this could signal the next phase of the so-called “Banana Zone,” which refers to a parabolic increase in altcoin prices, creating a banana-shaped curve on the chart. However, not everyone agrees with Raoul Pal, as crypto analyst Mark Harvey believes that Bitcoin dominance could strengthen further due to increased ETF inflows and institutional adoption. According to him, the current decline in BTC dominance is only temporary. As Bitcoin dominance declines, the CMC Altcoin Season Index currently sits at 41. While the Altcoin Season Index is at its highest level since February, it is still well below the altcoin season threshold of 75. This means we are not yet in full altcoin season. *This is not investment advice. Continue Reading: Famous Millionaire Raoul Pal Said "The Biggest Obstacle to the Long-Expected Altcoin Rally Has Been Removed" and Shared What He Expects Next!
Summary Rob Gronkowski, the retired football star with a goofy image, was described by a comedian as knowing better than to mess with bitcoin (except, maybe, to chew on it). Strategy (MSTR) understands and appreciates how valuable bitcoin can be as a permanent store of value. Speaking for myself, I see it as a 21st century digital collectible. MSTR buys and holds bitcoin through what it calls “intelligent leverage.” I see that as roughly akin to the leverage that Warren Buffett used to become an investment legend. MSTR has dramatically outperformed bitcoin, the S&P 500, and several big-name stocks. It’s ability to do that justifies MSTR trading at a premium to its bitcoin holdings. I’m bullish on MSTR based on intelligent leverage. I also like a convertible bond ETF (BMAX) and two preferred issues (STRF and STRK) that relate to MSTR, but with different reward-risk profiles. “Me know that not real money.” That, according to comedian Nikki Glaser, is how former professional football star Rob Gronkowski (Gronk) rebuked former teammate Tom Brady for the latter’s crypto misfortunes. She did that as part of her routine during a 5/5/24 Netflix comedy special “roasting” Brady. For those not in the know, Tom Brady played quarterback mostly for the National Football Leagues’s New England Patriots. Many say he was the GOAT (Greatest of All Time). And a big part of that came from his intellectual approach to the game. Gronk was Brady’s highly cherished teammate. He cultivated a crude party animal image. So Glaser’s quip stung not just Brady, but crypto in general. The full quote is: Tom lost $30 million in crypto. Tom, how did you fall for that? Even Gronk was like, ‘Me know that not real money.’ … Gronk actually does bitcoin which is where he just chews on a handful of nickels. Many people in real life feel that way about bitcoin. So, I thought hard before I clicked to “submit” a Strategy (NASDAQ: MSTR) article that was ultimately published on 12/20/24 . This company’s main endeavor is and since 2020 has been to buy, keep buying, and keep holding bitcoin. I agree with Gronk about that not being real money. But I saw something unique and interesting here. (See below.) So, I crossed my fingers and rated the stock “Hold.” At the time, MSTR (then known as “Micro Strategy” — it became just plain “Strategy” on 2/5/25 ) was not popular on Seeking Alpha . Of the previous 20 write-ups, 12 carried “Sell” or “Strong Sell” ratings. Four other analysts had “Hold” ratings. That means only four out of 20 reports carried bullish ratings. Since my prior report was published, MSTR turned in a decent performance. It’s up almost 14%. The S&P 500 is down about 4.5%. And more Seeking Alpha reports since 12/20/24 came out with favorable ratings. Today, I join the bulls. I’ll be raising my rating to “Buy.” I’ll also issue “Buy” ratings for several securities related to MSTR. (These are NMAX, STRF and STRK… see below.) Does this mean I think bitcoin is about to rally? Not necessarily. I’m really intrigued by MSTR’s use of “intelligent leverage.” But before getting to that, let’s first take a look at… Bitcoin’s Place in the World First, and to give Gronk his due, bitcoin truly is not money, or currency. An “Everyday Economics” booklet published by the Federal Reserve Bank of Dallas says: Money is anything that is widely accepted as a form of payment for goods and services or repayment of debts. In the limited economies of POW camps, cigarettes became money as soon as they became the accepted form of payment for rations that prisoners were exchanging. (Emphasis Supplied.) Bitcoin and cigarettes both qualified as “anything.” Cigarettes became “widely accepted” within the context of a particular society. Bitcoin, however, is not “widely accepted” for use in commerce. Many resent the role of central bankers in creating money and managing its supply. But that is not enough to turn privately created bitcoin into money. Maybe bitcoin will some day gain wide acceptance in commerce. But that’s not the case now. Consider, on the other hand, collectibles. Investopedia defines one as… an item worth far more than it was initially sold for because of its rarity and/or popularity. Stereotypically, these include “fine art, antiques, toys, coins, comic books, and stamps.” But the world evolves. Today, in the 21 st century, we also have digital collectibles . These… represent a revolutionary way to think about ownership and value in a world increasingly dominated by digital experience…. At its core, a digital collectible refers to a unique digital asset that is verifiable in the blockchain. These collectibles are often tokenized, meaning they are represented as a token on a blockchain that certifies their authenticity and ownership. Back in 2017, New York University Stern School of Business Professor and Seeking Alpha contributor Aswath Damodaran published an interesting blog suggesting bitcoin, which can’t be valued but only priced, may be a digital collectible. Speaking for myself, I say bitcoin is, indeed, a collectible. It’s not aesthetic like a work of art, or even a digital art piece (an NFT, or non-fungible token ). Nor is it functional like a toy. It doesn’t have to be. (Owners of gold bars don’t typically display or caress them. They lock them in secure vaults. Even many art works are stored away.) To me, collectibility is all about the desire to own a scarce thing simply because it feels good to do so. Collecting is rooted in our innate desire to organize, categorize, and possess objects of significance. Psychologists suggest that collecting satisfies fundamental human needs, such as the quest for knowledge, the pursuit of mastery, and the expression of identity. I believe the inherent scarcity of bitcoin (there can’t be more than 21 million bitcoins in circulation) and acceptance on the part of many humans concerning the desirability of ownership qualifies it as a collectible. That creates a base level of demand for bitcoin. That’s being enhanced by increasing willingness of more corporations to hold it (possibly as a hedge against inflation and currency risk) and Trump administration support. The latter is reflected in an Executive Order mandating creation of a “Strategic Bitcoin Reserve and United States Digital Asset Stockpile.” Let’s say this is a 21 st century version of gold bars stored at Fort Knox . The prospect of bitcoin prices rising over the long term is one aspect of the investment case for MSTR. But there’s much more… Rather Than Being a Mere Play on Bitcoin, Strategy is Financial Engineering Done Right and Done Well Financial engineering is a more sophisticated version of finance. Besides financial theory, it draws on applied mathematics, statistics, computer science and economic theory. Like many things, it can cause problems if misused. Case in point; overly exotic derivatives that caused problems during the 2008 financial crisis. But used properly and prudently, it can help enterprises achieve better results than they otherwise could, and often with the same or even lesser risk. For a positive example, we ned look no further than Warren Buffett’s investment activities at Berkshire Hathaway ( BRK.B ). Theses aren’t funded by his own money, or even by BRK.B’s treasury. It’s funded by the “float” earned by Berkshire’s huge insurance businesses. In other words, Buffett invested on margin. But it’s not as dangerous for him (i.e. for BRK.B) as it might be for you or I. By using funds from insurance companies he controlled, there was no risk of margin calls during down markets. Getting the benefits of margin without any of the downside has been a significant contributor to the returns that have made him legendary. MSTR invests in bitcoin using its own version of a leveraged strategy… It uses the phrase “intelligent leverage.” It mainly issues new equity and/or convertible debt to fund bitcoin purchases. It does so with a dose of inspiration from Douglas Adams’s The Hitchhiker’s Guide to the Galaxy . According to that work, the number 42 is the answer to “the ultimate question of life, the universe, and everything….” MSTR IR MSTR IR So MSTR initially launched a 21/21 Capital Raising Plan… $21 billion in new equity plus $21 billion in new convertible debt. (The total equals $42 billion!) Now, however, the company is amping it up… it’s now pursuing a 42/42 plan to raise $84 billion. New debt and new equity are coming on board gradually, as market conditions for debt, equity and bitcoin suggest. Here’s the current progress of the 42/42 plan. MSTR IR Did MSTR really need to discuss Adams and 42? Of course not. (Management could have just as easily introduced a 25/25 plan and then raised it to 50/50.) The 42 thing is just a bit of entertaining whimsy. But I appreciate that. It sets the tone for something extremely important… Financial engineering can get quite complex. And this is definitely so for MSTR. MSTR works hard to heavily over-collateralize its new securities based on bitcoin. (This isn’t a formal mortgage-like encumbrance. But it’s substantively-functionally equivalent to bitcoin being collateral.) And MSTR is careful to control dilution. Moreover, MSTR contrasts sharply, by 180 degrees, with the folks who designed the obscure and ultimately troublesome mid-2000s mortgage backed securities. This company works hard to be highly transparent. It does so through its detailed and extensive 10K discussion. (See pages 7-10). Its quarterly earnings presentations, such as the most recent one , are very detailed. And management is very clear and comprehensive in its earnings calls, such as the latest one from 5/1/25 ). MSTR really and truly wants investors to understand what it’s doing. It also works to provide alternative (to MSTR common) vehicles investors can use to implement varying reward-risk parameters (see below). Space here doesn’t permit a comprehensive discussion of the details of MSTR’s capital structure activities. But if you click to download that latest earnings presentation , and/or if you’d like to peruse historical presentations , you’ll find MSTR to be very generous – and clear -- with information. In evaluating the performance of its intelligent leverage strategy, MSTR developed a metric it calls BTC Yield. This compares the change in bitcoin holdings to the change in the number of diluted shares. (Again, MSTR doesn’t just churn out equity, even equity attached to convertible debt, wily nilly. It’s very sensitive to dilution). Here, from the Appendix portion of MSTR’s latest presentation , are details of number of coins owned and diluted shares. MSTR IR The current BTC Yield is in the lower right corner. It’s presently 13.7%. Here is how MSTR calculates it. MSTR IR The 13.7% figure was achieved in the context of a 15% target. On the 5/1/25 earnings call , CEO Phong Le announced that MSTR is raising the 2025 BTC Yield target to 15%-25%. The Performance of MSTR’s Intelligent Leverage Program The magnitude of the BTC Yield tells us management is achieving its goals. But let’s also evaluate things in terms that are more familiar to those of us in the investment world… comparative performance. MSTR helps us do this… MSTR IR MSTR IR MSTR IR That’s impressive stuff! But is it a bubble? We’ve seen those before. Who doesn’t know of the infamous 17 th century Tulip Bulb bubble ! More recently, we’ve experienced the turn of the century dot-com stock bubble and the mid-2000s housing bubble. Relatively strong performance for MSTR would not be appealing if the price progress was driven by empty air, or hopium . Since the company is in the business of buying and holding bitcoin, it seems reasonable to expect some sort of understandable relationship between the monetary value of MSTR’s bitcoin holdings and its (fully diluted) market capitalization. So I calculated that. Here’s what I have as of 4/27/25. Analyst compilation based on data from MSTR earnings deck and Yahoo! Finance (There’s no magic to any of this. I got everything from MSTR’s BTC-Yield slide reproduced above – the one that details coin ownership and convertibles-based dilution – and market prices from Yahoo! Finance.) We see here that MSTR trades at a hefty premium to the value of its bitcoin holdings. In a perfectly static world, I’d take this as a signal to “Sell,” or possibly even short the stock. But the world is not static. As with high P/Es on some of today’s more popular stocks, like Palantir ( PLTR ) or Tesla ( TSLA ), it’s legitimate to associate premium valuation with future growth prospects. MSTR’s premium-to-bitcoin reflects investors’ willingness to pay up to participate in the company’s intelligent leverage protocol. As shown by the relative performance slides above, investors who have thus far done this have been well rewarded. We also see that in the percentage changes of items in the above market cap to bitcoin table. Analyst compilation based on data from MSTR earnings deck and Yahoo! Finance Here, also, are management’s views on the premium MSTR stock commands. MSTR IR I agree with these points. And note especially the remarks on BMAX, STRK (conversationally nicknamed “strike”) and STRF (“strife”). I alluded to those above when I referred to other related securities with different reward-risk characteristics. Let’s now look at those… Other Securities in the MSTR Ecosystem – BMAX, STRK and STRF BMAX - Convertible Bonds This is the REX Bitcoin Corporate Treasury Convertible Bond ETF (NASDAQ: BMX) . It’s not issued by MSTR. It’s a REX Shares product. As its name suggests, it emphasizes convertible bonds. Most are issued by MSTR. But some are issued by other companies that pursue bitcoin strategies similar to that used by MSTR. This is not an income vehicle. Some bonds are zero coupon. Other have minimal coupons. The key feature is convertibility into common stock. I’ve long liked convertible bonds. But trading characteristics are not amenable to the needs of individual investors. Unless you trade into the millions, you could face hostile bid-ask spreads. Hence the merits for individuals of convertible bond ETFs. (They are not the most popular things around, but this vehicle is made to order for MSTR-type convertibles. It’s a great way for individuals to participate.) Conversion prices are fixed by contract. They’re set at a level high enough that the bondholder won’t choose to convert on day one. But if the stock rises, it will eventually rise to a level where it becomes worthwhile to convert. Because the conversion feature has no value on day one, the upside here is not as strong as it would be with stock ownership. On the other hand, there’s a lot of downside protection. Most of these bonds earn minimal interest. Ultimately, though, if bitcoin and the stocks disappoint and fall, the bondholder can look forward to getting 100 cents on the dollar at maturity. (As noted above, there’s a lot of collateral-like backing behind these securities.) These are short- and intermediate-term bonds. Here, from page 11 of the latest 10-Q, are details of the MSTR debt outstanding as of 3/31/25. page 11 of MSTR's latest 10-Q Notice that the longest-dated maturity is only about nine years out. BMAX doesn’t own it right now. The longest dated maturity in its current portfolio is 6/1/31. That’s for a convertible issued by Mara Holdings ( MARA ). But BMAX may eventually own the MSTR ’34 issue. Essentially, BMAX is like MSTR but a bit lower on the reward-risk scale. STRK and STRF – Preferred Shares These are preferred shares. Like bonds, they rank higher than equity in the capital structure. (That only comes into play in times of severe financial distress.) The main characteristic is that these are for income-oriented investors. But unlike bonds, they don’t mature. (That said, individual preferred issues may come with provisions that let issuers “call” them — force redemption — under certain conditions.) Both STRK and STRF are lower on the reward-risk scale than MSTR and BMAX. MicroStrategy Incorporated SER A PFD STK (NASDQ: STRF) is a preferred issue that in terms of capital structure hierarchy, ranks below the bonds issued by MSTR. But it’s higher than STRK and MSTR equity. Its dividend is fixed at 10% of the $100 face value. In other words, each share pays a $10 annual dividend (divided into four quarterly payments). Based on the current market price of STRF, the indicated yield is about 10.6%. (Because the issue is so new, Seeking Alpha data presentations don’t yet show the dividend or the yield.) Bear in mind, here, that MSTR has the right to pay the dividend in cash or MSTR common shares. It’s OKI if a STRF holder does not want to own MSTR common. The latter is liquid. So any shares received as a dividend can immediately be monetized by selling. That wouldn’t be the smoothest thing in the world. But for a 10.6% yield, I’d say that situation is quite acceptable. MicroStrategy Incorporated 8.00% SERIES A PERPETUAL STRIKE PFD (NASDAQ: STRK) is very similar to STRF. There are two differences. First, the dividend here is 8% of the $100 face value. In other words, it’s $8 per share. At STRK’s current price, that works out to an indicated yield of 8.7%. Here, too, the dividend can be paid in cash or MSTR stock. In the capital structure hierarchy, STRK ranks below STRF and above MSTR. So, why might anyone buy STRK instead of the higher-yielding STRF? The answer is convertibility. Unlike STRF, STRK gives holder a little bit of upside exposure to bitcoin and MSTR. It’s not a lot… Each STRF share is convertible into only 1/10 of a share of MSTR. The conversion feature is not valuable today. Assuming a $92 price for STRF, you’d need $920 worth of face value (10 shares) to get a single MSTR share. The latter trades at around $415. But conversion could become worthwhile in the future if these securities rise. It’ll take along time. But with an 8.7% yield, it pays to be patient. Risk The risk here is that bitcoin suffers a major, catastrophic and sustained collapse. MSTR’s intelligent leverage program is such that the company can readily withstand periodic corrections, or even downturns that amount to more than corrections. (Anyone can define “correction” in their own way.) But if bitcoin suffers a tulip-like prolonged crash, that would be troublesome to MSTR and all related instruments. Bitcoin/crypto cynics will undoubtedly trumpet this. And I can’t condemn anyone who does so. But the reason I devoted so much attention to the relationship between bitcoin and the collectible world is to put the worst-case scenario into a more familiar context. Art prices could enter a serious and prolonged crash. So, too, could antiques. So, too, could vintage baseball cards. Ditto even gold. According to Statista , only 7.16% of 2024 gold production was used in industry. Imagine how the price could crash if the other 92.84% of demand were to become compromised. Even if we add back the 44% used in jewelry, that would still leave 48.84% of demand that is completely non-utilitarian. That could still suggest widespread nightmares. Think of devastating bitcoin crash risk in this context. Suddenly it has much in common with many other things that have long been readily accepted. I believe that makes it much less scary. What to do About MSTR, BMAX, STRK and STRF Securities Here’s. the MSTR price chart. StockCharts.com Conventionally speaking, this looks fine. I like how the 10-day exponential moving average (EMA) recently moved up and through the now up-trending 50-day EMA. Consider, too, Chaikin Money Flow ( CMF ) and the Chaikin Oscillator (CO). Both measure which party to trades is more motivated. CMF does it for institutional investors. CO does it for the market in general. Both indicators are nicely bullish, Buyers being more motivated than sellers exerts upward pressure on stock prices. And CMF tells us it’s not just individuals chasing memes. That indicator measures the group labeled by Marc Chaikin (its creator) as “ smart money .” Here’s a much shorter-term look at MSTR and the rest of its ecosystem (BMAX, STRF and STRK)… just a few weeks. (BMAX, STRF and STRK are really NEW !) Seeking Alpha The picture shows exactly what the above verbiage suggests. MSTR is the main event. BMAX is a slightly more conservative alternative. STRF and STRK are much more stable as income vehicles. But between them, STRK’s tiny conversion feature gives it a little bit of volatility relative to STRF. So as miniscule as this sample is, we already see the securities properly aligned according to reward-risk theory. When it comes to rating stocks, I think in terms of probable future stock performance relative to the market, rather than literally buying, holding or selling. And since I’m not rating based on a quant model, I’ll eschew “Strong …” extremes. Absent an exceptional degree of conviction, I think “Buy,” Hold,” or “Sell” are enough. I see all as attractive relative to their respective security types. I translate that to the Seeking Alpha rating taxonomy by assigning “Buy” ratings to all four — MSTR, BMAX, STRF and STRK. The difference between them should be based entirely on one's own reward-risk preferences.
Can rate of Cardano (ADA) keep rising faster than other coins?
Riding bitcoin’s climb to levels last glimpsed in early February, the network’s raw processing muscle has rocketed to a record-setting 929 exahash per second (EH/s), a horsepower figure that illustrates just how fiercely miners are competing to add the next block. Miners Power Up: Bitcoin Network Reaches Record 929 EH/s Bitcoin’s hashrate surged roughly 3