2026-01-01 18:21:58

A publicly listed company has played a clever game: using borrowed funds to buy Bitcoin. When Bitcoin's price rises, the stock price follows; when the stock price rises, they borrow more to buy Bitcoin again... This cycle sounds like a perpetual motion machine, but a major listed company, MSTR, actually made it happen. Last year, its market value directly surpassed $100 billion. But how long can this game last? How risky is it? Today, we'll break it down.

**Why can MSTR do this? The key lies in leverage effects**

MSTR's per-share Bitcoin value can increase by up to 25%. This isn't out of thin air; there are two main reasons. First is the advantage in financing costs — they issue preferred shares with a dividend rate of only 10%, while Bitcoin's historical annual return is around 200%. The difference between these two is their profit margin. Second is accounting treatment — unrealized Bitcoin gains are also included in the profit statement, attracting a large number of bullish retail investors.

But problems also come with this approach: if Bitcoin enters a long-term sideways trend, the financing costs will gradually erode the value of this model. When that happens, it won't look so good anymore.

**How long can this game last? Three variables determine it**

First, look at Bitcoin's bull market cycle. If the Federal Reserve continues to cut interest rates, Bitcoin could potentially surge back to $120,000, allowing MSTR's model to keep snowballing. Second is regulatory attitude — if the US suddenly tightens banking regulations related to cryptocurrencies, MSTR's financing + holding model could be affected. The third variable is market sentiment; retail investors' FOMO (Fear of Missing Out) is a double-edged sword — it can push up the stock price but also intensify sell-offs during panic.

**How should we view MSTR?**

In simple terms, leverage is an accelerator in a bull market but a landmine in a bear market. Using MSTR as an indicator of Bitcoin market sentiment and cycles is okay, but treating it as a speculative tool requires caution. The crypto world is more complicated than it seems.

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ExpectationFarmer

· 6h ago

Perpetual motion machine? Ha, that's just playing with fire, you'll get burned sooner or later. MSTR's leverage trick is indeed wild, but it becomes awkward when it consolidates, and the financing costs kill it. Damn, unrealized gains can also be counted as profit? Only very reckless retail investors would dare to take the bait. If Bitcoin really hits 120,000, I would be convinced, but a punch from regulators is useless. Honestly, MSTR is basically an emotional indicator; treating it as an investment seems ridiculous. This is a casino—if you bet right, you can boast for a year; if you bet wrong, you'll lose everything, even your pants. Financing costs are only 10%, but the returns are 200%? The difference in the middle is so big that I want to buy the dip. When the bear market comes, this thing is more explosive than a nuclear bomb; when the stampede starts, no one will save you. Leverage is always a double-edged sword; it's most dangerous when you're feeling good, remember that. The crypto world is so disgusting; MSTR just exposes the game rules blatantly.

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