CoinDesk Podcast Network BITCOIN SEASON 2: The Great Bitcoin Treasury Bubble
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Jun 21, 2025 Dive into the explosive realm of Bitcoin treasury strategies! The hosts discuss how companies leverage Bitcoin for financial gain, questioning the sustainability of their tactics. MicroStrategy's bold moves, including dividends from preferred shares, are scrutinized. Uncover the risks tied to Bitcoin price fluctuations and corporate investments, and explore how emerging financial leverage shapes the crypto landscape. It's a tantalizing look at whether these strategies are innovative or just a precarious gamble waiting to fall.
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MicroStrategy's Convertible Note Strategy
- MicroStrategy pioneered the Bitcoin treasury play by using convertible notes to buy Bitcoin starting in 2020.
- This strategy leverages low-interest debt and stock price appreciation but depends heavily on Bitcoin's price increasing.
Preferred Shares Add Financial Pressure
- MicroStrategy issues preferred shares with 8-10% dividends to raise more capital for Bitcoin purchases.
- This adds financial pressure as dividends and debt obligations require liquidity beyond their core business revenue.
Dependence on Buyer Demand
- The Bitcoin treasury play depends on continuous demand from new buyers willing to pay premiums over Bitcoin's spot price.
- If demand falters or discounts increase, the structure risks collapse due to dilution and liquidity pressure.