Excerpt from State of Crypto Newsletter (published April 1, 2025)
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**Not financial advice.
Bitcoin remains resilient, holding firm near $80K despite the broader market cooldown. Volatility has been low by BTC standards, but a break of either $75K or $85K could determine the next leg.
We already talked about the Strategic Bitcoin Reserve news, so we won’t repeat, but that appears to be a major factor in how pricing could be going forward. Just like the stock market, we started seeing signs of a recovery:
Meanwhile, Strategy (formerly Microstrategy) issued new preferred stock with ticker STRF. This was priced at $85 and raised $711M, these shares don’t have a conversion feature like the previous STRK shares which can be converted. I believe STRK had an 8% yield and STRF has an 11% yield, which explains the changes. The crazy thing is STRK only converts to a 10:1 ratio. That means we have 3 stocks of this, MSTR, STRF, and STRK...this is getting really out of hand with all these loopholes and games. One wonders what happens if this doesn’t work out...
Now, Gamestop is pulling a Strategy, they announced a $1.3B private offering of convertible notes. The basic idea here is that you “borrow” $1.3B to buy Bitcoin, then if for whatever reason they cannot pay back the $1.3B, the offering gets converted into stock. What’s the doomsday scenario here? Technically the Bitcoin could go down in value, then they are unable to pay back the debt, but the intention there would be buying GME at the current stock price then. This avoids them (in theory) having to dilute the stock to dump on the market. Again, this was invented by Strategy and it seems to be working well for them, however GME dropped 22% the next day.
This is also after news that Metaplanet, a Japanese company purchased roughly $280M of Bitcoin as well. So we’re seeing a gradual trend of companies with tough businesses convert their equity to Bitcoin in order to “fight” the cost of capital from declining over time. This could of course backfire if Bitcoin plummets in cost.