Yesterday, I dropped my latest on MicroStrategy MSTR 0.00%↑ for Seeking Alpha. The theme of the article was very similar to what I wrote about MSTR here on Heretic Speculator a couple weeks ago in “Fund Flows and Crowd Behavior:”
As always, one should enter the comments section in articles that cover polarizing stocks at their own risk. In a totally acceptable chat with a different reader, I made the case that everyone in MSTR is essentially a “trader” rather than an “investor” because the stock moves entirely on Bitcoin’s valuation and doesn’t pay shareholders dividends out of cashflow from business operations. A pretty fair and reasonable point of view, in my opinion.
Not so!
“CryptoKing” (🤣) weighed in and chose violence. I’ve never really had the impulse to say “don’t you know who I am” in any discourse before, but that changed after reading this gem (bold my emphasis):
I'm not sure if you should touch anything BTC related if you are talking about cashflow and dividends. You don't have the proper understanding of a young and evolving asset class like this. You should've resisted the urge to hit 'submit' when writing this Seeking Alpha article because you're clearly not equipped to advise others what to do with regards to Microstrategy.
Oh really, motherf***er?
I’m Moe Greene!
In all seriousness, lets take these haymakers one at a time.
I’m not advising anyone what to do. I share what I do and why I do it. You want an advisor? Go buy one.
Seeking Alpha asked me if I wanted to provide the platform with an update on MSTR. Why? Because I’m f***ing Moe Greene.
This “young and evolving” asset class is almost entirely driven by yield and cash flow.
Lido Finance ($LDO-USD) is the biggest protocol in all of DeFi because it allows users to put their staked ETH back to work for additional yield. AAVE ($AAVE-USD) is the second biggest protocol in DeFi because it’s a lending and borrowing application - so, yields again. MakerDAO ($MKR-USD) is a top five protocol. Why? Again, it’s yields; this time from the treasury notes backing the DAI stablecoin. Uniswap ($UNI-USD) is the largest DEX because it has the most liquidity. What benefit could liquidity providers possibly get out of providing said liquidity? Fees from swaps! AKA share of protocol cashflow…
As far as I can tell, every single smart contract blockchain has a reward rate for transaction validation. Why? Yield is an incentive to participate!
But, Mike, bItCOiN iS dIFfeReNt.
No, it is not.
Bitcoin ($BTC-USD) may just be a different form of proof-of-stake. Where rather than staking coins directly on chain, miners have to spend a fortune to stake machines and hope that…
I standby what I said. Crypto and blockchain may be new and exciting, but the participants in this space are not immune from economic law. There’s a reason why the then-largest public Bitcoin miner Core Scientific CORZ 0.00%↑ went bankrupt in 2022.
The point I’m making is not that I do actually have an understanding of this space (that should be obvious), it’s that these are the kinds of idiots who fly to this market like moths to a zapper. This dude who chirped me is probably going to get wrecked and I doubt he’s going to see it coming. Why? Because he thinks he’s investing when he’s really playing the slots.
The lesson? Hubris. Keep it in check. And be careful who you’re letting guide your thinking.
Now, I’m going to avoid the massage tables so I don’t end up with a bullet in my eyeball.
Let’s check in on some of the Bitcorn fundamentals…
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