In a wide-ranging discussion, crypto analyst Dylan LeClair broke down the innovative "Bitcoin strategy playbook" pioneered by MicroStrategy MSTR and is now being adopted even by soccer clubs.
What Happened: LeClair noted on the “What Bitcoin Did” podcast that the strategy's core involved leveraging corporate finance tools to accumulate Bitcoin BTC/USD. For public companies like MicroStrategy, this includes issuing convertible bonds and equity to purchase Bitcoin, effectively creating a "Bitcoin balance sheet."
"Sailor figured out how to give a bond market starved of yield exposure to Bitcoin volatility," LeClair noted. This allowed MicroStrategy to borrow at extremely low rates and use the proceeds to buy Bitcoin.
LeClair noted that while this strategy seemed risky to many, it has paid off handsomely. MicroStrategy’s market cap has grown from $1 billion to over $30 billion since implementing this approach.
LeClair believes more companies will adopt versions of this playbook as Bitcoin gains mainstream acceptance. However, he cautioned that fully embracing the strategy remains a “radical step” for most corporations at this stage.
“We’re getting the same sponsorships that clubs get in the professional leagues because they want exposure to Bitcoiners,” McCormack said.
“We’re starting to see those trickle in,” LeClair concluded, “but I don’t think we’re at the point in time where that’s widely adopted yet.”
Recently, Defiance ETFs launched MSTX MSDTX, the first single-stock leveraged ETF for MicroStrategy in the U.S.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
