Citi, a renowned banking giant, has partnered with SIX Digital Exchange (SDX), the digital assets-focused branch of Switzerland’s main stock exchange. Together, they are working on tokenizing non-publicly traded shares to...
Read moreCiti, a renowned banking giant, has partnered with SIX Digital Exchange (SDX), the digital assets-focused branch of Switzerland’s main stock exchange. Together, they are working on tokenizing non-publicly traded shares to simplify the $75 billion market cluttered with PDFs and paper documents.
The collaboration involves Citi serving as a custodian and issuer agent for tokenized versions of late stage, pre-IPO equities on SDX’s regulated blockchain-based Central Securities Depository (CSD) platform. The platform is set to launch in the third quarter and will be initially focused on Switzerland, Singapore, and other parts of Asia, excluding U.S. investors.
Private shares in high-growth, venture-backed companies represent a significant subset of the alternative asset class, valued in the trillions of dollars. With firms staying private for longer periods, secondary markets play a crucial role in providing liquidity for investors and employees. However, the current manual and cumbersome transaction processes and lack of scalable infrastructure pose challenges.
Nisha Surendran, digital asset emerging solutions lead at Citi Ventures, highlighted the absence of scalable infrastructure in private markets, leading to a reliance on PDFs and paper documents for transactions. Settlement of transactions can take five to eight weeks, and the lack of integration with investors’ wealth statements further complicates the process.
SDX CEO David Newns emphasized Switzerland’s mature digital-securities regulatory environment and the utilization of R3’s Corda distributed ledger technology for building the blockchain-based securities depository. This technology enables seamless access to investment instruments through investors’ broker and custodian.
Citi’s involvement as a custodian on SDX reflects its strategy to offer clients access to new digital asset markets, including private market assets. Collaborations with digital asset banking group Sygnum and SBI Digital Markets will facilitate access to the pre-IPO equities on the SDX platform.
This partnership marks a significant step towards streamlining the private market asset tokenization process, providing investors with greater accessibility and efficiency in their transactions.
Bitcoin experienced a breakout earlier this week, causing traders to set their sights on the $100,000 level in the coming days. However, this euphoric trade may be short-lived as May’s seasonality...
Read moreBitcoin experienced a breakout earlier this week, causing traders to set their sights on the $100,000 level in the coming days. However, this euphoric trade may be short-lived as May’s seasonality approaches.
Jeff Mei, COO at BTSE, mentioned that historically, the next few months have been weak for financial markets, with many investors following the “Sell in May and Walk Away” adage. Despite this trend, Mei noted that Bitcoin has been performing well, reaching $97K and other growth stocks making a comeback in recent weeks. While weak GDP numbers from the US may pose some risk, Mei mentioned that rate cuts could potentially lead to a rebound.
The “Sell in May and go away” saying is a common seasonal strategy in traditional financial markets. It suggests that investors should sell their holdings at the start of May and return around November to capitalize on underperforming summer markets.
Historically, US stock markets have shown weaker performance from May through October compared to November through April. This trend has become a rule-of-thumb for some investors. Bitcoin also shows recurring seasonal patterns, influenced by macro cycles, institutional flows, and retail sentiment.
While past performance doesn’t guarantee future outcomes, data shows that May months with negative returns for Bitcoin are often followed by more declines in June. This suggests that crypto markets may react to macro and seasonal sentiment similar to equities, especially with more institutional capital entering the space.
Traders may exercise caution based on historical price seasonality and fading momentum after strong Q1 rallies. Altcoins, especially meme coins, may be vulnerable to pullbacks due to recent hype-driven rallies and speculative flows.
Vugar Usi Zade, COO at crypto exchange Bitget, mentioned that since 1950, the S&P 500 has delivered an average gain of just 1.8% from May through October. Meanwhile, Bitcoin’s average Q2 returns stand at 26%, but with a median of only 7.5%, indicating outlier-driven performance and recurring volatility.
As Q3 approaches, the average return for Bitcoin drops to 6%, with a slightly negative median. Zade highlighted that caution is advised heading into May, as historical data shows that Q4 tends to be Bitcoin’s strongest seasonal period.
In conclusion, while cryptocurrency markets are not bound by traditional Wall Street calendars, market psychology still responds to narratives. The “Sell in May” strategy could potentially become a self-fulfilling prophecy if technical indicators weaken and sentiment shifts.
Bithumb is undergoing a major reorganization as it prepares for an upcoming initial public offering (IPO). The company, based in Seoul, will split into two separate entities. Bithumb Korea will focus...
Read moreBithumb is undergoing a major reorganization as it prepares for an upcoming initial public offering (IPO). The company, based in Seoul, will split into two separate entities. Bithumb Korea will focus solely on operating the core crypto exchange business and will be the entity seeking a public listing. The other unit, Bithumb A, will be responsible for venture investments, asset management, and new business initiatives. This restructuring is set to be completed by July 31.
Bithumb A will consolidate the exchange’s investment arms, including Bithumb Partners, which has shifted its focus to financial product investments such as equities, bonds, and convertible bonds. Additionally, Bithumb Investment, which manages equity stakes and partnerships with external companies, will also fall under Bithumb A’s oversight.
While there were previous reports of Bithumb considering a NASDAQ listing, the company’s current plans involve a listing on South Korea’s Kosdaq first, with a U.S. listing as a secondary objective. In 2024, Bithumb reported an operating profit of 130.8 billion won ($95 million), a significant improvement from the previous year.
Bitcoin’s price surge and its comparison to gold as a safe-haven asset is gaining traction as global markets face volatility. In Asian trading hours, BTC climbed above $87,000 alongside other cryptocurrencies...
Read moreBitcoin’s price surge and its comparison to gold as a safe-haven asset is gaining traction as global markets face volatility. In Asian trading hours, BTC climbed above $87,000 alongside other cryptocurrencies like Cardano’s ADA, BNB Chain’s BNB, XRP, and ethereum (ETH). This rally reversed the recent declines and boosted tokens like Solana’s SOL by 5.2% in the past week.
The ongoing trade wars and fears of inflation have prompted investors to see bitcoin as a hedge similar to gold. Nick Ruck, director at LVRG Research, highlighted the changing correlation of bitcoin with U.S. equities and its strengthening connection to the price of gold. The recent surge in bitcoin to over $87,000 reflects renewed investor confidence amidst market stabilization following tariff-related panic.
Gold reached new highs above $3,380 per ounce, garnering year-to-date gains of 25%. Despite dropping over 20% from its January peak, bitcoin’s rally above $87,000 marks its highest level since early April. The weakening dollar, reflected in the three-year low of the dollar index (DXY), is driving investors towards safe-haven assets like gold, European bonds, and now, bitcoin.
Jeff Mei, COO at BTSE, pointed out the impact of President Trump’s actions on the U.S. dollar, leading investors to seek alternative assets such as bitcoin. With growing downward pressure on the dollar, bitcoin has the potential to become a safe-haven asset in the current economic climate.
In addition to market analysis, technical indicators reveal a positive outlook for cryptocurrencies like Cardano’s ADA, XRP, Solana’s SOL, and BNB. ADA is maintaining upward momentum with strong support levels, while XRP shows signs of breaking out from sideways trading. Solana’s rally above $135 is backed by strong volume confirmation, while BNB’s surge above $600 is supported by large holders and recent token burn events.
Overall, the narrative of bitcoin as “digital gold” is gaining traction as investors seek alternatives in times of market volatility and economic uncertainty.
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By [Your Name] (All times ET unless indicated otherwise) Bitcoin (BTC) continues to defy global economic uncertainty, inching closer to reclaiming $86,000. It is now less than 3% away from its...
Read moreBy [Your Name] (All times ET unless indicated otherwise)
Bitcoin (BTC) continues to defy global economic uncertainty, inching closer to reclaiming $86,000. It is now less than 3% away from its “Liberation Day” high. To put the move into perspective, bitcoin dominance — which measures BTC’s share of the total cryptocurrency market cap — is approaching 64%, a level not seen since January 2021.
In contrast, the Nasdaq 100 is still 5% away from its own Liberation Day high, underscoring bitcoin’s relative strength versus U.S. equities.
According to X account Cheddar Flow, the S&P 500 has just formed a “death cross” — a traditionally bearish signal that occurs when the 50-day moving average falls below the 200-day moving average. The last time this happened was March 15, 2022, when S&P 500 initially rose by 11% in the following week, only to be followed by a 20% decline. Bearish sentiment is also reflected in the options market, where investors are reportedly buying large volumes of NVDA puts, signaling expectations of lower prices.
In a Bloomberg interview on Monday, Treasury Secretary Scott Bessent reaffirmed confidence in the U.S. bond market, dismissing concerns that foreign nations are dumping Treasuries.
“I am not seeing a dumping of U.S. Treasuries,” Bessent said. “The Treasury has lots of tools, but we’re a long way from needing them.” He also emphasized the enduring status of the U.S. dollar as the world’s reserve currency, despite the DXY index — which measures the dollar’s value against a basket of major trading partners — falling below 100 and dropping over 10% in recent weeks.
Bessent also confirmed that the Trump administration is seeking a new Federal Reserve Chair to replace Jerome Powell, with interviews set to begin later in the year. He concluded the interview by suggesting that the VIX (S&P 500 volatility index) may have peaked after the largest one-day percentage drop in its history last week. Stay alert!
What to Watch:
Crypto:
April 15: The first SmarDEX (SDEX) halving means the SDEX token’s distribution will be cut by 50% for the next 12 months.
April 16: HashKey Chain (HSK) mainnet upgrade enhances network stability and fee control capabilities.
April 17: EigenLayer (EIGEN) activates slashing on Ethereum mainnet, enforcing penalties for operator misconduct.
April 18: Pepecoin (PEP), a layer-1, proof-of-work blockchain, undergoes its second halving, reducing block rewards to 15,625 PEP per block.
April 20, 11 p.m.: BNB Chain (BNB) — opBNB mainnet hardfork.
April 21: Coinbase Derivatives will list XRP futures pending approval by the Commodity Futures Trading Commission (CFTC).
Macro:
April 15, 8:30 a.m.: Statistics Canada releases March consumer price inflation data.
Core Inflation Rate MoM Prev. 0.7%
Core Inflation Rate YoY Prev. 2.7%
Inflation Rate MoM Est. 0.6% vs. Prev. 1.1%
Inflation Rate YoY Est. 2.6% vs. Prev. 2.6%
April 16, 8:30 a.m.: The U.S. Census Bureau releases March retail sales data.
Retail Sales MoM Est. 1.4% vs. Prev. 0.2%
Retail Sales YoY Prev. 3.1%
April 16, 9:45 a.m.: Bank of Canada releases its latest interest rate decision, followed by a press conference 45 minutes later.
Policy Interest Rate Est. 2.75% vs. Prev. 2.75%
April 16, 1:30 p.m.: Fed Chair Jerome H. Powell will deliver an “Economic Outlook” speech. Livestream link.
April 17, 8:30 a.m.: U.S. Census Bureau releases March new residential construction data.
Housing Starts Est. 1.42M vs. Prev. 1.501M
Housing Starts MoM Prev. 11.2%
April 17, 8:30 a.m.: The U.S. Department of Labor releases unemployment insurance data for the week ended April 12.
Initial Jobless Claims Est. 226K vs. Prev. 223K
April 17, 7:30 p.m.: Japan’s Ministry of Internal Affairs & Communications releases March consumer price index (CPI) data.
Core Inflation Rate YoY Est. 3.2% vs. Prev. 3%
Inflation Rate MoM Prev. -0.1%
Inflation Rate YoY Prev. 3.7%
Earnings (Estimates based on FactSet data)
April 22: Tesla (TSLA), post-market
April 30: Robinhood Markets (HOOD), post-market
Token Events:
Governance votes & calls
Venus DAO is discussing the forced liquidation of the remaining debt owed by a BNB bridge exploiter account that “supplied extraneously minted BNB to Venus and generated an over-collateralized debt position.”
Aave DAO is discussing taking further steps to deprecate Synthetix’s sUSD on Aave V3 Optimism over technical developments that have “compromised its ability to consistently maintain its peg.”
GMX DAO is discussing the establishment of a GMX reserve on Solana, which would involve bridging $500,000 in GMX to the blockchain and transferring the funds to the GMX-Solana Treasury.
Treasure DAO is discussing handing the core contributor team the authority to wind down and close the Treasure Chain infrastructure on ZKsync and manage the primary MAGIC-ETH protocol-owned liquidity pool given the “crucial financial situation” of the protocol.
April 15, 10 a.m.: Injective to hold an X Spaces session with Guardian.
April 16, 7 a.m.: Aergo to host an Ask Me Anything (AMA) session on the future of decentralized artificial intelligence and the project.
April 16, 3 p.m.: Zcash to host a Town Hall on LockBox Distribution & Governance.
Unlocks
April 15: Sei (SEI) to unlock 1.09% of its circulating supply worth $10.08 million.
April 16: Arbitrum (ARB) to unlock 2.01% of its circulating supply worth $27.17 million.
April 18: Official Trump (TRUMP) to unlock 20.25% of its circulating supply worth $325.97 million.
April 18: Fasttoken (FTN) to unlock 4.65% of its circulating supply worth $82.60 million.
April 18: UXLINK (UXLINK) to unlock 11.09% of its circulating supply worth $18.29 million.
April 18: Immutable (IMX) to unlock 1.37% of its circulating supply worth $10.07 million.
Token Launches
April 15: WalletConnect Token (WCT) to be listed on Binance, Bitget, AscendEX, BingX, BYDFi, LBank, Coinlist and others.
April 16: Badger (BADGER), Balacner (BAL), Beta Finance (BETA), Cortex (CTXC), Cream Finance (CREAM), Firo (FIRO), Kava Lend (KAVA), NULS (NULS), Prosper (PROS), Status (SNT), TROY (TROY), UniLend Finance (UFT), VIDT DAO (VIDT) and aelf (ELF) to be delisted from Binance.
April 22: Hyperlane to airdrop its HYPER tokens.
Conferences:
Day 2 of 3: Morocco WEB3FEST GITEX Edition (Marrakech)
April 15: Strategic Bitcoin Reserve Summit (online)
Day 1 of 2: BUIDL Asia 2025 (Seoul)
Day 1 of 2: World Financial Innovation Series 2025 (Hanoi, Vietnam)
Day 1 of 3: NexTech Week Tokyo
April 22-24: Money20/20 Asia (Bangkok)
April 23: Crypto Horizons 2025 (Dubai)
April 23-24: Blockchain Forum 2025 (Moscow)
Token Talk
Story Protocol’s IP tokens experienced a 20% drop and recovery within hours during an unusual trading session on Monday.
Trading volume surged on exchanges including Binance and OKX Spot, with $138 million recorded after the price rebound.
The sudden price movement was isolated from broader market trends, sparking speculation about insider activity or coordinated selling.
Also on Monday, MANTRA’s OM token plummeted over 90% in hours, dropping from around $6.30 to as low as 37 cents and wiping out over $5 billion in market capitalization.
The token has since rebounded slightly to trade around 63 cents.
Laser Digital, a Nomura-backed investor, was initially flagged for depositing $41 million in OM to OKX, but the company denied selling, clarifying it was collateral return from a financing trade. Shorooq Investors also denied selling.
Derivatives Positioning
BTC shorts have been liquidated on most exchanges in the past 24 hours, excluding BitMEX and Gate.io, according to Coinglass. The opposite is the case in ETH.
XRP’s perpetual futures open interest has dropped from 544.7 million XRP to 480 million XRP, diverging from the price recovery seen since Monday last week.
SUI, ONDO, ADA and APT have seen a notable increase in futures open interest in the past 24 hours. Of those, XMR is the only one with the positive OI-adjusted cumulative volume delta, representing net buying pressure.
On Deribit, short-dated BTC and ETH options continue to show a bias for protective puts, suggesting cautious sentiment.
Flows on OTC desk Paradigm have been mixed with both calls and puts bought in the April expiry.
Market Movements:
BTC is up 1.19% from 4 p.m. ET Monday at $85,877.18 (24hrs: +1.35%)
ETH is up 0.59% at $1,645.30 (24hrs: -1.97%)
CoinDesk 20 is up 0.99% at 2,519.69 (24hrs: +0.19%)
Ether CESR Composite Staking Rate is up 18 bps at 3.18%
BTC funding rate is at 0.0184% (6.7003% annualized) on Binance
DXY is unchanged at 99.70
Gold is up 1.26% at $3,245.30/oz
Silver is up 0.81% at $32.35/oz
Nikkei 225 closed +0.84% at 34,267.54
Hang Seng closed +0.23% at 21,466.27
FTSE is up 0.92% at 8,209.04
Euro Stoxx 50 is up 0.82% at 4,951.51
DJIA closed on Tuesday +0.78% at 40,524.79
S&P 500 closed +0.79% at 5,405.97
Nasdaq closed +0.64% at 16,831.48
S&P/TSX Composite Index closed +1.18% at 23,866.50
S&P 40 Latin America closed +1.8% at 2,340.02
U.S. 10-year Treasury rate is up 1 bp at 4.39%
E-mini S&P 500 futures are up 0.12% at 5,447.25
E-mini Nasdaq-100 futures are up 0.26% at 18,983.25
E-mini Dow Jones Industrial Average Index futures are unchanged at 40,750.00
Bitcoin Stats:
BTC Dominance: 63.80 (0.16%)
Ethereum to bitcoin ratio: 0.01913 (-0.31%)
Hashrate (seven-day moving average): 896 EH/s
Hashprice (spot): $44.1 PH/s
Total Fees: 6.33 BTC / $536,017
CME Futures Open Interest: 134,730
BTC priced in gold: 26.6 oz
BTC vs gold market cap: 7.56%
Technical Analysis
On Monday, the bitcoin cash-bitcoin (BCH/BTC) ratio failed to penetrate the trendline characterizing the 12-month bear market.
A potential move above the trendline could see breakout traders join the market, lifting BCH higher.
Crypto Equities
Strategy (MSTR): closed on Monday at $311.45 (+3.82%), up 0.62% at $313.38 in pre-market
Coinbase Global (COIN): closed at $176.58 (+0.62%), up 1.28% at $178.84
Galaxy Digital Holdings (GLXY): closed at C$15.81 (+3.47%)
MARA Holdings (MARA): closed at $12.95 (+3.52%), up 1.24% at $13.11
Riot Platforms (RIOT): closed at $7.01 (-0.71%), up 0.71% at $7.06
Core Scientific (CORZ): closed at $7.06 (-0.14%)
CleanSpark (CLSK): closed at $7.78 (+3.73%), up 1.29% at $7.88
CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $12.70 (+1.44%), up 1.44% at $12.90
Semler Scientific (SMLR): closed at $34.26 (+1.48%)
Exodus Movement (EXOD): closed at $39.43 (-10.55%), unchanged in pre-market
ETF Flows
Spot BTC ETFs:
Daily net flow: $1.5 million
Cumulative net flows: $35.46 billion
Total BTC holdings ~1.11 million
Spot ETH ETFs
Daily net flow: -$6 million
Cumulative net flows: $2.28 billion
Total ETH holdings ~3.36 million
Source: Farside Investors
Overnight Flows
Chart of the Day Personalized: Disney’s Bob Iger to exit Apple’s board
In the Ether
**Insert interesting content about current events, stories, etc. in the crypto world**
That’s all for now, stay in-the-know with The Parrot Press for the latest updates and insights on the dynamic world of cryptocurrencies and finance!
Bitcoin and other cryptocurrencies are experiencing an uptick on Friday following a sharp decline alongside traditional markets the day before. Solana’s SOL and dogecoin (DOGE) have both risen over 4% in...
Read moreBitcoin and other cryptocurrencies are experiencing an uptick on Friday following a sharp decline alongside traditional markets the day before. Solana’s SOL and dogecoin (DOGE) have both risen over 4% in the past 24 hours, leading the gains among major cryptocurrencies. XRP (XRP), BNB Chain’s BNB, and Tron’s TRX are up between 2%-3%, while Ether (ETH) has seen a 2.4% decrease, continuing its recent downward trend with a loss of 12% over the past week.
The announcement on Wednesday of a 90-day halt on new tariffs (excluding those on China) briefly prompted a relief rally across various risk assets. Despite this brief positivity, the markets saw a reversal on Thursday. Some traders believe that the price action of bitcoin indicates a potential turning point, setting the stage for a push towards $100,000 by the end of the year.
“The unexpected policy change briefly calmed market nerves and reduced short-term crypto volatility. However, we advise caution,” noted market experts, pointing out that while some are selling at higher levels, the presence of December $100,000 calls indicates long-term optimism.
Ming Wu, the CEO of RabbitX, described the market shift as a complete turnaround. He attributed this shift to President Trump’s recent announcement of a tariff pause. Wu emphasized that this policy change injected optimism into the markets, resulting in a strong rally in both equities and cryptocurrencies.
Wu highlighted eased trade tensions, mentioning that the tariff pause provides “breathing room” while still maintaining pressure on China. From a technical standpoint, he sees the setup for a surge due to significant declines before the announcement. The tariff news triggered a short squeeze, with buyers entering the market at key support levels, fueling the rally.
Ryan Lee, the chief analyst at Bitget Research, pointed out bitcoin’s 6% surge from Thursday. Lee highlighted strong demand from institutions and long-term holders, who view bitcoin as a hedge amidst uncertainty.
Looking ahead, Lee believes that the sustainability of this momentum depends on macro clarity, technical strength, and market sentiment. The $80,000 level is now crucial to monitor. Lee predicts that bitcoin could range between $80,000 and $85,000 midweek, with a bullish scenario pushing towards $85,000 if risk appetite remains high, or a pullback to $78,000-$79,000 if uncertainties resurface. Traders are advised to closely monitor macro developments and fund flows.
I first discovered Bitcoin in 2012 while studying at UT Austin. With interests in Austrian economics and open-source software, I was captivated by bitcoin as the intersection of both. I became...
Read moreI first discovered Bitcoin in 2012 while studying at UT Austin. With interests in Austrian economics and open-source software, I was captivated by bitcoin as the intersection of both. I became an early thought leader, co-founding the Satoshi Nakamoto Institute to house foundational writings and cypherpunk philosophy.
Throughout my roles at BitPay, Kraken, and most recently Riot Platforms (RIOT), my work has spanned bitcoin infrastructure and advocacy. At Riot, I led responses to environmental criticisms, including a viral parody video that put the critics on the defensive and reframed the debate around mining and value creation.
Now, with The Bitcoin Bond Company, I am taking on the next frontier: unlocking bitcoin for fixed-income investors.
Unlike Michael Saylor’s long-only strategy, I want to build bankruptcy-remote, bitcoin-only structures with clear life-cycles and risk-tranching. The idea is to make Bitcoin more palatable to traditional credit allocators.
My goal? Acquire $1 trillion in bitcoin over the next 21 years — market conditions permitting.
On the price cycle, I believe the four-year halving model is losing relevance for price prediction purposes. Bitcoin’s CAGR is now tied to interest rates, noting its shift toward becoming a global macro asset. Higher Fed rates pull capital out of Bitcoin — that’s what slows adoption.
While education remains a major hurdle, I’m optimistic. Ten years ago, this idea was laughed off. Today, Bitcoin-backed credit products are inevitable.
At Consensus 2025, I am focused on accelerating that education, especially among institutions looking to diversify beyond real estate and equities.
I am also clear-eyed about the risks and hurdles in bitcoin adoption. The biggest challenge is education. Most investors have never seen a fixed-income product backed purely by bitcoin. They’re used to real estate or corporate debt — this is a new asset class for them.
When asked about concerns like low transaction fees or empty blocks in 2025, I pushed back. People worry about low fees, but that assumes a static system. If there’s ever an attack or censorship, fees skyrocket — and miners spin up. It’s anti-fragile by design.
Ultimately, my pitch is simple: Bitcoin is no longer a fringe experiment. It’s a core monetary technology — and it’s time the credit markets caught up.
Bitcoin (BTC) made steady progress towards $85,000 during European trading hours on Tuesday, with traders eagerly anticipating the impact of U.S. tariffs set for Wednesday. Leading the way with modest gains...
Read moreBitcoin (BTC) made steady progress towards $85,000 during European trading hours on Tuesday, with traders eagerly anticipating the impact of U.S. tariffs set for Wednesday.
Leading the way with modest gains among major cryptocurrencies, Dogecoin (DOGE) and Cardano (ADA) saw an increase of over 7%, while others like ether (ETH), XRP, Solana’s SOL, and BNB Chain’s BNB rose nearly 5%.
According to CoinGecko data, the overall market capitalization saw a 3% decrease, with the CoinDesk 20 also experiencing a 3% bump in the last 24 hours.
The current market sentiment is largely risk-averse, as U.S. equities faced a downturn last week, with the S&P 500 recording a 3% decline, the worst since September 2023. This prompted investors to flock to safe-haven assets like gold, which reached new highs early Tuesday.
The upcoming tariffs, along with various U.S. economic and labor reports from the past month, have overshadowed crypto sentiment. Augustine Fan, head of insights at SignalPlus, highlighted the lack of significant catalysts, such as substantial ETF inflows, and a market that seems stuck in a low-conviction state as the quarter draws to a close – one that saw an 11% loss for bitcoin and the S&P 500’s biggest decline since Q2 2022.
On the futures front, speculative positions on bitcoin through the CME are currently the most bearish in years, marking a stark contrast from the bullish sentiment seen in January.
While there is uncertainty in the market, long-term holders show resilience, with Glassnode data indicating that holders with 3-6 month positions are seeing growing profits and trading at levels not seen since June 2021 – a sign of conviction over panic selling. Newer whales are also holding steady instead of selling off their positions, helping to stabilize bitcoin’s price floor, as highlighted by Glassnode.
Jupiter Zheng, a partner at HashKey Capital’s Liquid Fund and Research, views the tariff uncertainty and economic data dump as short-term challenges.
Despite the current dip in prices driven by risk-off sentiment, Zheng remains optimistic in the long term, noting the growing integration of crypto by institutions and the development of new regulatory policies worldwide to foster adoption.
Is Strategy (MSTR) in trouble? Led by Executive Chairman Michael Saylor, the firm formerly known as MicroStrategy has vacuumed up 506,137 bitcoin (BTC), currently worth roughly $44 billion at BTC’s current...
Read moreIs Strategy (MSTR) in trouble?
Led by Executive Chairman Michael Saylor, the firm formerly known as MicroStrategy has vacuumed up 506,137 bitcoin (BTC), currently worth roughly $44 billion at BTC’s current price near $87,000, in the span of about five years. To the casual observer, the company seems to have a magic, unlimited pool of funds from which to draw on to buy more bitcoin. But Strategy acquired a sizable chunk of its stash by issuing billions of dollars in equity and convertible notes (debt securities which can be converted into equity under special conditions), and more recently via the issuance of preferred stock, a type of equity that provides dividends to investors.
However, the price of bitcoin has been pushed down about 20% since peaking above $109,000 two months ago. And though such swings in prices are far from unusual, the particularly aggressive recent purchases by Saylor and team mean Strategy’s average acquisition price has risen to $66,000. The company is really only one more moderate swing down in price from being in the red on its buys.
Which begs the question: Could all of Strategy’s financial wizardry end up backfiring on the company should bitcoin keep heading lower?
“It’s highly unlikely that it results in a scenario where [Strategy] has to liquidate a bunch of bitcoin because it gets margin called,” Quinn Thompson, founder of crypto hedge fund Lekker Capital, told in an interview. “For the most part, the debt is very likely to be able to be refinanced for the convertible notes. And then [the firm] started issuing this perpetual preferred stock, which never has to be repaid.”
In other words, not only is there very little chance that Strategy could suffer the kind of blowup that shook over crypto firms and projects in 2022 (like Genesis or Three Arrows Capital), but the firm has even refrained from posting its bitcoin holdings as collateral for loans — with the exception of a loan taken from Silvergate, which was repaid in 2023.
Even so, that does not necessarily mean that it’s blue skies ahead for MSTR investors, because under various scenarios, Saylor could be forced to issue more equity than the market can handle in order to maintain course.
“If he’s not paying dividends with Strategy’s cash flow, he’s going to issue more shares and wreck the stock price. But it’s no different than what he’s doing already. Every time the retail bids it up, he wrecks the stock price by issuing more shares. In the future, he will have to do that, and the flows might not go into bitcoin. They might go to repay these debtors, and it will hurt the share price,” Thompson said.
Saylor’s balancing act
Strategy currently employs three different methods for raising capital: it can issue equity, convertible notes, or preferred stock.
Issuing equity means that Strategy creates new MSTR shares, sells them on the market, and uses the proceeds to buy bitcoin. Naturally, that creates selling pressure on MSTR and can potentially push the stock downward.
Convertible notes have allowed Strategy to raise funds quickly without diluting MSTR stock. Typically, investors like these notes because they offer a solid yield, they benefit if the stock surges, and they can usually be redeemed in cash for an amount equal to the original investment in addition to interest payments. The tremendous volatility of Strategy’s convertible notes, however, has allowed the company to mostly issue them at a zero percent interest rate and still meet high demand from sophisticated market participants, who have made bank trading that volatility.
Finally, Strategy has begun deploying preferred stocks. These are instruments that tend to appeal to investors seeking lower volatility and more predictable returns through dividends. There are currently two offerings: STRK, which gives an 8% annual return; and STRF, which pays 10% annualized.
But why is Strategy issuing all of these different types of investment vehicles? The idea is to create demand for Strategy for all kinds of investors that may have different tolerances to risk, Jeffrey Park, head of Alpha Strategies at crypto asset management Bitwise, told in an interview.
“The convertible bond investors and the common equity investors were generally aligned in that they were both volatility seeking structures,” Park said. “Preferred equities are different. They actually are favored by investors who want to minimize volatility at all costs for a steady, reliable and high coupon that they feel is worth the credit risk.”
“Strategy’s capital structure is almost like a seesaw in a playground,” Park added. “The common shareholders and converts are on one side, the preferred equity holders are on the other side. As sentiment shifts, the weights move around, and it tilts the value between these securities. But no matter how the seesaw moves, its total weight — which is Strategy’s enterprise value — remains the same. It’s just a redistribution of people’s perceived value across the liabilities that exist on the company’s balance sheet.”
Risks
Even so, Strategy now finds itself in a situation where it must pay 8% dividends on STRK, 10% dividends on STRF, and a blend of 0.4% interest rate on its convertible bonds.
With Strategy’s software business providing very little cash flow, finding the funds to pay for all of these dividends might be tricky.
The company will likely need to keep issuing MSTR stock to pay the interest it owes, Thompson said. “It will hurt the share price. In the most extreme scenario, the stock could trade at a discount [from its bitcoin holdings], because he would be having to issue shares to pay interest and cover cash flow.”
“The really draconian scenario would be for the discount to get so wide, like 20% or 30%, like Grayscale’s GBTC [prior to its conversion into an ETF], that the shareholders riot and tell him to buy back shares and close the discount,” Thompson added. “Right now, he’s adding shareholder value by selling the stock at an elevated price and buying bitcoin, but in the future the reverse might be true, where the best way to add shareholder value would be to sell the bitcoin and buy the stock. But that’s quite far away.”
Saylor lost controlling voting power over the company in 2024 due to the continuous issuance of MSTR stock, meaning that the scenario above could theoretically happen, especially if activist investors decided to get involved.
Another potential risk for MSTR holders is that the 2x long Strategy exchange-traded funds (ETFs) issued by T-Rex and Defiance, MSTX and MSTU, have seen weirdly persistent demand despite the stock’s drawdown. Every time investors want to gain or increase their exposure to these ETFs, the issuers have to buy twice as many MSTR shares. The popularity of these ETFs has helped create constant buying pressure for MSTR — so far, they’ve accumulated over $3 billion in MSTR exposure.
The problem is that the music might stop someday. And if these ETFs begin to sell off their MSTR shares, the reaction on the stock price could be violent.
“I don’t know where the endless capital comes from to buy the dip. These ETFs have gotten obliterated. They’re down huge,” Thompson said. “I mean, this is not a structural move up in the demand curve that you should count on. It’s not something you should really bake into your 10-year predictions of bitcoin price, but as long as it’s existing, it’s important for bitcoin. So I’m continually amazed by it.”
