Cobo Founder Shen Yu Discusses “Micro-Strategy Alchemy”: Benefits for Institutions, Traders, and Shareholders—But Who is Suffering Losses?

According to DiscusFish, MSTR raises funds through the sale of convertible bonds and ATM offerings (issuing new shares in the market at any time), with these funds primarily used to purchase more Bitcoin, achieving the goal of “coin hoarding.” This strategy not only makes MSTR one of the largest corporate holders of Bitcoin but also attracts professional institutions (such as hedge funds, bond investors, and options traders) to participate. These institutions take advantage of the high volatility of MSTR stock for volatility arbitrage, capturing short-term profits.

However, the risks associated with this strategy are primarily borne by common shareholders. The extreme volatility of MSTR stock—partly stemming from fluctuations in Bitcoin prices and partly from the “crash” effect that ATM offerings may cause (i.e., new share issuance depresses stock prices)—places retail investors under pressure from declining stock prices in the short term. Nevertheless, common shareholders may also gain “BTC Yield” through long-term holding, which refers to the increase in the number of Bitcoins per share, allowing them to exchange short-term volatility for the opportunity to hold more Bitcoins in the long run.

At the same time, long-term Bitcoin investors (BTC holders) benefit from the continuous influx of funds into the market and the rising price of Bitcoin. MSTR’s strategy indirectly drives the value growth of Bitcoin, as its large-scale purchases increase market demand.

Shen Yu’s tweet has sparked widespread discussion. Some community members believe that those who have not invested in Bitcoin or MSTR stock may have become “losers” by missing out on the market rally. However, others point out that common shareholders may have actually incurred losses due to high volatility and issuance pressure, while other market participants engaged in volatility arbitrage by professional institutions may also become “invisible losers.”

Moreover, some analysts have noted that MSTR’s “infinite funding” strategy appears particularly successful when Bitcoin prices are rising, but should Bitcoin prices fall or market sentiment turn, common shareholders and convertible bondholders may face greater risks. This phenomenon highlights the intersection of cryptocurrency and traditional financial markets: while MSTR’s strategy creates profits for some participants, it may impose risks or opportunity costs on others. As the Bitcoin market continues to develop, the sustainability of MSTR’s model and the extent of its impact remain to be observed by the market.