I am long mstr. Here are a few thoughts on why ETFs are an incredibly inefficient way to hold bitcoin. Despite bitcoin being a high volatility asset, they yield around -.2%. I think over time, as the nascent market develops, bitcoin will migrate into more efficient custody vehicles. Corporations running a bitcoin treasury operation (Bitcoin Treasury Companies, or “BTC”s) are able to achieve much higher yields on their bitcoin holdings than etfs. This is due to bitcoin’s volatility and the volatility of bitcoin treasury companies’ stock prices. MSTR increased bitcoin/share last year by around 74.3% and ytd has increased bitcoin/share by another 25% giving the stock around a 118% bitcoin yield over the past year and a half. (So if you shorted mstr a year and a half ago when the stock traded at around 2x nav, you are now short at .91x nav — good luck breaking even on that trade). Just as USD on banks’ balance sheets are worth more than USD stashed under a mattress (P/B often exceeds 2), bitcoin on BTC’s balance sheets are worth much more than bitcoin stashed away in an etf or a wallet BTCs are an existential threat to bitcoin etfs (Why hide your money under the matress when you can deposit it in a bank and earn interest?). I expect ETF managers (and their allies) will fight tooth and nail against BTCs — probably why lots of crypto and fintwit influencers regularly bash BTCs For now, BTCs are able to earn extraordinarily high bitcoin yields because their stocks trade at a significant premium to NAV and are very volatile. A company whose stock trades at 2x nav can sell new stock at an effective bitcoin price of $240,000 and then buy bitcoin at $120,000. The same company can issue convertible preferred stock. A convertible preferred is basically two securities — a bond and an equity call option. Because implied volatility is high, the issuer can issue the bond at a 0% yield and the call option struck at a significant premium to the current stock price (depending on the implied volatility and term of the option, the option can be struck as high as a 60+% premium to the then current stock price, or a 300% ish premium to NAV). So at the end of the day the issuer has either borrowed money at a 0% interest rate for some years to buy bitcoin, or the issuer has sold stock at a 300% premium to NAV and bought bitcoin at nav. Other options for issuers including straight debt or perpetual preferreds. These are basically direct bets by the issuer that bitcoin will appreciate at a faster rate than the cost of the debt and serve to lever up the issuers balance sheet (as opposed to selling straight equity, which delevers an issuers balance sheet) Over time BTCs’ ability to achieve gigantic yields will likely decrease, but a 200bp+ premium to LT treasury yields seems like a very conservative floor, and 10% seems easily achievable over the long term. Incidentally, if a BTC’s stock price ever trades at a discount to NAV, they can generate bitcoin yield by selling bitcoin to buy back stock So the simplified valuation math on bitcoin treasury companies and bitcoin etfs is NAV + PV of future bitcoin yield. For purposes of illustration, if a BTC generates a 10% annual bitcoin yield for 20 years, using a 7% discount rate equates to a PV of about 2.45x NAV (so the value of the BTC would be 1+2.45 = 3.45x the value of the bitcoin on the BTC’s balance sheet) To me, a company increasing bitcoin/share at 30%+ annually, 1.5-2x NAV seems very cheap, as it will only take around 2.5 years to “earn back” the NAV premium.