The crypto markets took place on Friday. Especially Bitcoin $109,325.32 There were significant decreases in focused company shares. Microstrategy (MSTR) and Semler Scientific (SMLR) lost approximately 6 %, while metaplanet shares traded in Japan decreased by 24 %. The losses experienced by these companies drew attention with the loss of Bitcoin a little more than 2 %. The sustainability of the financial approaches implemented by such companies in the sector was the subject of discussion on social media.
Bitcoin Treasury Strategies and Discussions
Bitcoin Treasury strategy has been shared with different opinions about the recently prominent companies. Michael Saylor’ın led and some companies adopted by the methods of Bitcoin may have negative consequences were expressed. Lowstrife, a social media user in the industry, claimed that these companies have accumulated Bitcoin with high leverage and that this damage Bitcoin’s basic philosophy.
“Bitcoin Treasury companies are the most popular issue of the week. MSTR, Metaplanet, Twenty One, Nakamoto. – Lowstrife
According to experts, Microstrategy and similar companies provide financing to get more Bitcoin over the ratio of company value to net asset value (MNAV). As long as it is over MNAV 1, it is possible for companies to take additional Bitcoin by attracting new resources from investors. However, if this ratio decreases below 1, the total market value of the company falls behind its existing assets. This stands out as a situation that can make it difficult for the company to find new capital and fulfill its financial obligations.
GBTC example and risks
Grayscale’s Bitcoin Investment Fund (GBTC), a previous example, pointed out that there are similar risks in the market. In the 2020 and 2021 bull market, the price of the fund was traded well above the net asset value. However, the thoughts after the thought, this premium has seriously turned into discounts and triggered chained bankruptcies in the market. As a result of these events, Bitcoin fell from $ 69,000 to $ 15,000 in a year.
“As in the GBTC at that time, the current game is based on how much Bitcoin will collect and when to sell it to the market.” – Nic Carter, Castle Island Ventures Partner
The discussions brought about different views in the crypto community. Those who support Microstrategy suggested that if the company is in a difficult situation, it could take some measures. For example, Blockstream CEO Adam Back said that the company could create value for the investor with the purchase of Bitcoin and purchase of shares when the company’s MNAV ratio fell below 1.
“If it goes below Mnav 1, the amount of bitcoin per investor can be increased by selling Bitcoin and taking back the share, which will be in the interest of the shareholder.” – Adam Back, Blockstream CEO
Some experts warned that this mechanism may cause new problems in the market in the future. Especially in companies whose financial structure is highly based on Bitcoin, the lack of balance of MNAV can shake investor confidence and affect capital markets.
The price fluctuations in crypto markets and the financial strategies of Bitcoin -based companies continue to cause intense controversy in the sector. It is recommended that investors closely follow the rate of company value to net asset value and how companies respond to challenging market conditions. The financing structure and possible risks of such firms have the quality that may cause significant effects on digital asset markets in the future.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
