🧠 Food for thought

Implications, context, and why it matters.

Strategy’s bitcoin buying model depends on a risky stock-market premium

• Strategy works less like a software business and more like a market-driven bitcoin holding company that raises money to buy more bitcoin 1.
• Its approach relies on selling new shares when the stock trades above the bitcoin value behind each share, then using that cash for more purchases 2.
• The goal is to lift the bitcoin backing per share, which the company calls “Bitcoin Yield” 1.
• If that premium fades, the model loses force. New share sales become harder to justify and can dilute existing holders’ bitcoin exposure 2.

Strategy’s model faces competition from a growing set of regulated crypto investment products

• Strategy offers a high-risk way to track bitcoin, yet more countries are moving toward regulated and cheaper options 1.
• Japan is aiming for 2028 to allow cryptocurrency exchange-traded funds (ETFs), which would let investors buy crypto ETFs through regular brokerage accounts, similar to gold 3.
• SBI Holdings, a Japanese financial services group, and Nomura Holdings, a Japanese investment bank, are preparing for a possible rule change and exploring crypto ETFs, though no final policy has been set 4.
• The U.S. and Hong Kong already have these funds. Their simpler structure gives investors a more direct path to crypto assets, which could chip away at Strategy’s appeal 3.