"The hangover from the paper bitcoin summer delusion has arrived, swiftly and painfully. We see it, not in the bitcoin price, which is once more calmly and unremarkably ticking upward - pushing up against $117,000 Tuesday evening - but in the stock prices of bitcoin treasury companies. They're all getting slaughtered: Look at the graphs of $MSTR, Metaplanet, $NAKA, H100, Smarter Web Company and they all look the same - shitcoin-style pump into the heavens,"
"For a while there, we - and the rest of Wall Street - thought anyone could arbitrage financial markets. Issue shares at above their intrinsic value; buy bitcoin; repeat. For this vertiginous summer fling, Wall Street was paying more than a dollar for a dollar's worth of bitcoin, and everyone's eyes lit up with dollar signs; this is a trade that, if you're able to, you'll happily do all day long."
"So, with the outstanding, tradeable float of shares increased overnight some 50x - and, one would suppose, plenty of second-layer PIPE " insiders" wanna dump-dump-duuuuump - the formula was pretty simple: lots of extra supply meet no demand equals collapsing price. In bitcoin treasury company analyst Adam Livingston's words: "And you get a perfect physics lesson here: add mass, you lose altitude.""
Bitcoin's market price is rising modestly toward $117,000 while public bitcoin-treasury company stocks have plunged sharply. Traders issued equity above intrinsic value to buy bitcoin, creating a pumped arbitrage trade that inflated share prices. Subsequent share unlocks and PIPE releases multiplied tradable floats, enabling significant insider and secondary selling. The sudden surge in supply against limited demand caused steep declines, with NAKA dropping 50% after S3 PIPE restrictions ended and collapsing 87% from a May peak. The treasury-arbitrage strategy has largely unwound, prompting critics to declare the treasury mania over.
Read at Bitcoin Magazine
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