Ecoinometrics - What if MicroStrategy had bought Ethereum instead of Bitcoin?
And other common MSTR questions.
MicroStrategy just announced that they have bought more Bitcoins and that they are also planning to sell some of their stock to buy even more BTC.
That’s a good time to address some common questions subscribers have sent over the past few weeks:
What if MicroStrategy decided to invest in Ethereum instead of Bitcoin?
Is MicroStrategy doing better than simple dollar cost averaging on their BTC purchases?
What to think about MSTR selling shares to buy BTC?
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What if MicroStrategy had bought Ethereum instead of Bitcoin?
The takeaway
Could Michael Saylor have played his crypto cards differently? Yes, absolutely yes:
With a different purchasing strategy MSTR could have accumulated more coins.
If they had decided to use Ethereum as a treasury asset they would have generated better returns.
And if they had made use of Ethereum staking to generate yield things would be even better.
That being said Bitcoin is a natural investment choice for MicroStrategy if you look at the big picture:
Bitcoin as digital gold and its use as a reserve asset is a simple story to tell.
Thus by transforming MSTR into a Bitcoin holding company he can win on the stock price and on Bitcoin at the same time.
It isn’t as clear that this strategy would have worked by replacing BTC with ETH.
But MicroStrategy might end up in a tough place over the next 1~2 years:
Risk of a recession.
Some debt to repay.
Competition coming from the potential introduction of spot BTC ETFs in the US.
Those are all headwinds for MSTR. But if they manage to raise cash and use it judiciously to buy more coins on the cheap and repay their debt, there is a path for them to survive.
What if MicroStrategy decided to invest in Ethereum instead of Bitcoin?
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