The Infinite Money Loop

We did it again!

Pete and I went live again last night to bring you important details about a MAJOR move that’s about to happen in the crypto space this coming Monday.

There’s still time for you to rewatch last night’s urgent Zoom briefing here 👇.

The last time we did this bitcoin (BTC) rocketed up nearly 10% in only one week.

And I believe an even bigger move move could happen as soon as next week…

So I thought I’d use today’s issue to prepare you for what’s coming.

Let’s start with MicroStrategy (Nasdaq: MSTR) a business-intelligence software company that’s been around for over three decades.

You might have seen MicroStrategy in the news recently, but it’s not for anything the company is doing in the software sector.

That’s because MicroStrategy is barely a software company anymore.

Remember how big a deal it was last week when Microsoft shareholders voted on whether the company should buy bitcoin as an asset class?

Well, MicroStrategy has been buying bitcoin for nearly five years.

Back in 2020 MicroStrategy’s then-CEO Michael Saylor made the bold decision to start acquiring bitcoin as a potential hedge against inflation.

And the company kept buying bitcoin — even as its price fluctuated.

It was a risky move. But so far the decision has paid off in spades for MicroStrategy.

As chairman, Saylor has overseen a massive surge in the company’s stock price over the past five years.

This year alone the company’s shares are up as high as 521%.

Of course, this incredible stock story has nothing to do with the company’s software business.

By one estimate, MicroStrategy’s value per share of its software business represents only 0.3% of the stock price.

But the company’s bitcoin business is booming!

It’s so important to MicroStrategy’s business that the company had to come up with a new performance indicator.

It’s called “bitcoin yield.”

And it tracks the percentage change over time in the ratio of the company’s bitcoin holdings to its assumed diluted shares outstanding.

But you don’t need to understand how “bitcoin yield” works to understand why I urged Pete to join me for another live briefing last night.

All you need to know is that MicroStrategy now owns more than 2% of bitcoin’s total supply…

A supply that’s capped at 21 million coins.

And that brings me to Monday’s big move…

What’s Happening On Monday?

On December 23, MicroStrategy will enter the Nasdaq-100.

It’s a stock market index reserved for the largest 100 nonfinancial companies in the full Nasdaq Composite Index by market capitalization.

And it’s a big deal.

You see, MicroStrategy became eligible to join the Nasdaq-100 because it’s technically a software company.

But as I just showed you, it owes most of its market cap to the company’s bitcoin investment strategy.

MicroStrategy’s market cap is up from around $1.4 billion on August 11, 2020 when the company first bought bitcoin to around $93.9 billion as of Monday.

That’s a gain of over 6,600%.

Obviously, one of the main factors behind this huge gain is bitcoin’s recent surge to over $107,000.

MicroStrategy’s impending Nasdaq-100 Index membership announcement also lifted the stock.

But it’s HOW the company acquired bitcoin that we should focus on.

Because MicroStrategy was able to make all those bitcoin purchases by leveraging debt.

It sold stock and other convertible-debt offerings to help finance its bitcoin purchases.

In other words, the company has created a kind of infinite money loop.

As its stock price goes up… it’s able to buy more bitcoin.

As bitcoin’s price goes up… it’s able to buy more bitcoin.

And now that the company is joining the Nasdaq-100 a lot of institutions with ETFs that mirror the Nasdaq-100 will start buying MicroStrategy…

And that will cause its stock price to go up.

As its stock price goes up…  it’s able to buy more bitcoin.

Do you see what’s going on here?

It’s like an infinite money loop.

Here’s My Take

MicroStrategy has the biggest corporate portfolio of digital assets in the world.

Its explosive growth shows how a cryptocurrency-driven corporate strategy can work…

And its entry in the Nasdaq-100 proves that its high-risk bitcoin approach can gain market acceptance.

Like I told you last week about Microsoft’s vote…

It’s not a matter of if, it’s a matter of when buying bitcoin as an asset appeals to a major corporation.

Maybe it’s Amazon or Apple. Maybe Microsoft’s shareholders eventually relent.

But it will happen.

In the short term, I see Microstrategy’s big move to the Nasdaq-100 doing two things.

One is that it could cause a massive spike in bitcoin like we saw last week.

Second — and more important over the long term — is that it proves that bitcoin is a legitimate form of collateral.

We entered 2004 with a new bitcoin ETF that showed folks it’s OK to invest in bitcoin now.

We’re ending the year by showing folks it’s not just something you can invest in…

But something that you can borrow against.

Either way, I see bitcoin going up and to the right.

And as we’ve seen before…

When bitcoin goes up smaller coins tend to make even bigger moves.

My concern is that if you wait until Monday you might miss out on the four altcoins I’ve identified that could make the biggest moves.

So if you haven’t seen it… make sure to click on this link to watch last night’s urgent Zoom briefing.

Regards,

Ian King
Chief Strategist, Banyan Hill Publishing