Microstrategy Begins $42B Bitcoin Investment Initiative

The Breakdown First Five - Thursday, October 31, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Bitcoin Stuck

Go to sleep. Wake Up. Check Price. Good Price. Same Price. Bitcoin hasn’t moved since yesterday, we’re still ranging between $71k and $73k. This is now the longest period Bitcoin has spent above $70,000. Bitcoin changing hands above these levels and a slow consolidation is undoubtedly positive to confirm the move, but Bitcoiners are growing impatient for the breakout. 

4. ETF Records

With Bitcoin trapped just below all time highs, the ETFs put on a record day. Massive volume drove $890M worth of inflows, with Blackrock capturing $872M by themselves. This was the largest day ever for Blackrock and the second largest overall, and still no price movement. The ETFs now hold a million BTC.

3. Treasury Advised on Tokenization

The Treasury Borrowing Advisory Committee has advised the Treasury to think about the positive aspects of stablecoins and asset tokenization. The private sector body said that stablecoins are driving a “modest increase in demand” for Treasuries. They also noted that tokenization of the Treasury market could increase settlement efficiency that could be “impactful at scale.” Finally, they warned that blowing up Tether would trigger a “fire-sale” of Treasuries.

2. Kraken’s Restructure

Kraken announced the appointment of a new co-CEO, board member and investor Arjun Sethi. They said this marked a “new day” for Kraken, which will make “organizational discipline decisions” to eliminate “organizational layers”. Not announced were rumors that this is actually a wide-scale restructuring, with both the CTO and COO leaving and 15% of staff laid off. Chairman Jesse Powell expressed trust that Sethi can “inject new leadership and momentum.”

1. Saylor’s Plan

Microstrategy has announced a massive $42B plan to buy more Bitcoin. The firm will raise $21B in equity and $21B in debt over the next three years. Equity offerings technically start today, with Microstrategy announcing the entire $21B as an up front shelf offering to be sold off over time. Microstrategy also guided that they will aim for a BTC yield between  6% to 10% over the next three years, allowing the stock to fit better in pricing models. Another evolution in Bitcoin capital.