Crypto treasuries are firms that load crypto onto their balance sheets to diversify holdings and hedge against inflation–especially as crypto is increasingly viewed as a debasement trade. These firms often hoard crypto to boost their stock price. In recent months, simply announcing a crypto treasury plan has added premiums to market prices almost instantaneously.
No less than 152 public companies control over 950,000 coins, collectively worth over $110 billion, according to sources familiar with the matter. The whale in this ocean though, however, is Michael Saylor’s MicroStrategy, which started hoarding bitcoin in August of 2020.
MicroStrategy pioneered the crypto treasury model, financing its crypto buying mostly through convertible notes–short-term debt issued by a firm that converts into an equity stake down the line. MicroStrategy wasn't always a crypto leveraged whale though, Saylor’s firm started off as a software company before pivoting aggressively to bitcoin. Today, it now owns 73 billion dollars worth of bitcoin, and the firm's share price moves in near lockstep with bitcoin's volatility. This poses a vital question… What happens if bitcoin crashes? How exposed are these crypto treasury firms to the coin's downfall?
If you think bitcoin will shoot off to the moon, buying MicroStrategy may be your path to the stars.
Equity Insights
↑Trilogy Metals (TMQ): Late Monday the administration announced they were investing 36.5 million in the company, a 10% stake. Shares were up almost 300% premarket Tuesday morning. This move comes after the White House’s investment into domestic rare earth miner MP Materials earlier this year with the goal of reshoring rare earth metals mining and ending our Chinese rare earth metal reliance.
↑Axsome Therapeutics Inc (AXSM): An up and coming drug development company that has tiptoed into the spotlight recently with an article in Forbes magazine's latest edition. Shares have shot up 35% over the past year to $122. Axsome has more patents coming and expects to achieve $16.5 billion in annual sales soon. Herriot Tabuteau, the visionary founder of Axsome, has a big vision for the company. Don't let their rapid rise fool you, they are here to stay.
Theme of the Week
This week's TOTW is different, a short blurb about a little gripe I have… As humans we shouldn't accept any limits placed upon us, whether by us or external force. I hate when I hear people say, “I’m not good at this”...“I can’t do this because I am not that type of person”. This perspective is intellectually dull and it drains us of our innate ability to persevere through life’s challenges. When I hear people with this perspective not only does it platonically turn me off, it saddens me, how can one go through life doubting oneself. Don’t you see the harm you are causing yourself.
About This Newsletter
This newsletter shares insights into our complex current day economic/geopolitical situations and provides clear, actionable equities insights as well. Whether just getting into the game or a seasoned veteran, this newsletter is your edge.