Empire LIVE Hivemind: Crypto Treasury Companies, Sui Hack & Solana’s New Consensus
May 31, 2025
The hosts explore the burgeoning trend of crypto treasury plays, spotlighting MicroStrategy's recent moves. They dive into the launch of the stablecoin Plasma and dissect the implications of the Sui hack on security and centralization. A fascinating discussion unfolds on Solana's new consensus model, balancing efficiency and decentralization. Plus, the looming threat of quantum computing on cryptocurrency security raises eyebrows. Tune in for insights that can shape the future of the crypto landscape!
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MicroStrategy Volatility Strategy
- Convertible debt arb funds buy MicroStrategy debt and short its equity to remain delta neutral while harvesting volatility.
- Leveraged ETFs exacerbate stock volatility, enabling these funds to generate returns by 'gamma scalping'.
Discount Trading and Bitcoin Sales
- If MicroStrategy trades below net asset value, shareholders can demand Bitcoin sales to buy back stock for higher Bitcoin per share.
- The process could face resistance due to tribalistic Bitcoin accumulation beliefs within MicroStrategy's management.
Collateral Lending Risks
- Risk emerges if lenders use crypto treasury shares as loan collateral, potentially triggering liquidation cascades.
- Later entrants in treasury plays likely face tougher debt terms compared to pioneers like MicroStrategy.