Darren Easton on Nostr: MicroStrategy (#MSTR) stands out as a unique trade because it benefits from both long ...
MicroStrategy (#MSTR) stands out as a unique trade because it benefits from both long global carry (low yields) and short global carry (Bitcoin volatility). Here’s why:
1. Long Global Carry: MSTR benefits from financial repression caused by historically low yields in credit markets. With such poor returns on “safe” investments, investors are indirectly subsidizing equity returns like MSTR’s because they can’t directly hold Bitcoin.
2. Short Global Carry: MSTR capitalises on Bitcoin’s rare combination of high volatility and liquidity. Bitcoin’s “liquid volatility” makes it unique in a financial system where scarcity often equates to illiquidity.
3. Epistemic Incongruence: MSTR also benefits from the perception that Bitcoin could go to zero. This creates a binary setup: if Bitcoin collapses, the left tail risk is retained, but if it succeeds, the upside potential is massive. This binary dynamic fuels volatility, which benefits MSTR.
In essence, MSTR’s value comes from its leveraged exposure to Bitcoin, the ongoing financial repression, and the flaws in the traditional financial system. I see it as “GME on steroids”—a bet against the broken system we live in.
1. Long Global Carry: MSTR benefits from financial repression caused by historically low yields in credit markets. With such poor returns on “safe” investments, investors are indirectly subsidizing equity returns like MSTR’s because they can’t directly hold Bitcoin.
2. Short Global Carry: MSTR capitalises on Bitcoin’s rare combination of high volatility and liquidity. Bitcoin’s “liquid volatility” makes it unique in a financial system where scarcity often equates to illiquidity.
3. Epistemic Incongruence: MSTR also benefits from the perception that Bitcoin could go to zero. This creates a binary setup: if Bitcoin collapses, the left tail risk is retained, but if it succeeds, the upside potential is massive. This binary dynamic fuels volatility, which benefits MSTR.
In essence, MSTR’s value comes from its leveraged exposure to Bitcoin, the ongoing financial repression, and the flaws in the traditional financial system. I see it as “GME on steroids”—a bet against the broken system we live in.