Strategy Invents Financial Metrics And Everybody Applauds 👏

MSTR's own website states that their reports do not reflect the financial reality:

"None of BTC Rating, BTC Credit, or BTC Risk are measures of financial results or liquidity, or key performance indicators."

Strategy's software business also operates at a ≈$60M loss, but on their website and socials they decide to ignore a part of expenses and market it as profit. So they create their own non-standard accounting and credit metrics and advertise those.

Strategy has a consistent pattern of misrepresenting their financials to look more favorable in their public marketing campaigns. A lot of it is in the form of Michael Saylor's videos, podcast appearances and posts on X. A lot seem to think that just because someone says something in a video or a social media post it must be true.

Words can be deceiving, numbers not so much.

In Net Terms, Bitcoin is a Geopolitical Liability, Not an Asset

This is because Bitcoin is vulnerable to attacks targeting its consensus and network availability. A sufficiently resourceful adversary can yield the Bitcoin network inoperable and/or untrustable

A nation state adversary can take the Bitcoin network down, at least a significant portion of it. And it doesn't require them having access to quantum computers or compromising the underlying cryptographic primitives in other manner.

This is why sovereign strategic Bitcoin reserves, including BTC as a Central Bank reserve asset is not a good idea, at least in the current state and design of the Bitcoin protocol.

MicroStrategy Is Dependent On Refinancing Capacity, Not Bitcoin Price

MSTR won't have to sell Bitcoin if BTC price goes down, they'll have to sell Bitcoin if they're unable to acquire funding along the maturity of their debt wall.

MicroStrategy is essentially a leveraged trade on Bitcoin, based on the following cycle:

1️⃣ Acquire funding via debt or equity
2️⃣ Buy Bitcoin
3️⃣ Repeat

This cycle works for as long as MSTR is able to obtain funding. Once funding becomes unavailable (i.e. market isn't willing to lend at favorable interest rates), funding must come from asset liquidation (i.e. the sale of Bitcoin).

The availability of funding is mostly dependent on Bitcoin's price. As long as Bitcoin price and trend is favorable around the dates when the debt wall matures - MSTR should be able to continue their leveraged trade. MSTR share price vs Bitcoin NAV is also important. If MSTR trades a premium over Bitcoin's NAV it allows Microstrategy to short their own equity and long Bitcoin.

However, an unfavorable Bitcoin price action environment (e.g. during a bear market) that coincides with debt repayment obligations may trigger the unwinding of this leveraged position, forcing MSTR to sell Bitcoin, thus putting further downwards price pressure on Bitcoin, which lowers Microstrategy's equity even more, which makes lender even less likely to lend. The end result is an even more degraded funding capacity, which at the limit leads to bankruptcy.

Debt starts maturing from 2028 (≈$1B), but the most significant portion of ≈70%/$5.8B matures in 2029-2030. This is where the price of Bitcoin is of great importance for Microstrategy's solvency.

So don't expect Microstrategy to have pressure to sell significant amounts of Bitcoin before at least 2027, even if the Bitcoin price stays low.

Just wait until Bitcoin hype accounts find out that Czechia has not adapted the Euro, so it's not a part of the Eurozone.

Thus, the Czech National Bank (CNB) is a part of European System of Central Banks (ESCB), but not a full Eurosystem central bank, so it's not represented in and not bound by the ECB Governing Council's monetary policy decisions.

No Eurozone National Central Bank (NCB) is holding Bitcoin in their reserves, and ECB's current policy rejects the idea of BTC as a reserve asset.

Watch what they do, not what Bitcoin hype media says.

Bitcoin is not just for speculative gambling

Nation state-linked companies are already settling their transactions in Bitcoin. Sure, they're using Bitcoin only as an intermediary, not as the end settlement unit of account, but this takes Bitcoin's utility far beyond gambling.

Just because Bitcoin isn't replacing gold as money, doesn't mean that it's a failure. Just because Bitcoin bitcoin collapsed below 100K, doesn't mean it won't come back higher (liquidity cycles suggest it will).

Extremes are better for engagement, but reality is very inclusive.

My article on Gold vs Bitcoin, and how Bitcoin needs Gold, but Gold doesn't need Bitcoin: https://illya.sh/threads/bitcoin-needs-gold-gold-doesnt-need-bitcoin.html

Illya Gerasymchuk 2025-11-02 14:59

Gold is within the fabric of money, not just Central Banks

A lot of posts on X frame Central Banks as malevolent institutions, and by some form of conspiracy they hold gold in their reserve accounts. And apparently not holding gold is a step towards monetary freedom - even more if you forego an atomic element (Au) for a cryptographic computer algorithm (Bitcoin).

A more productive approach is asking why do Central Banks chose gold over all other commodities and assets. Every single world reserve currency, without exception, started on a gold and/or silver standard. Gold has been used as money for over 5000 years.

I've written several articles on what makes gold so special and how Bitcoin is not a replacement for gold. I'll leave them linked below

Coffee outperformed Gold in the last 5 years

Would it be sound to conclude that coffee beans are better money and investment than gold, and that Central Banks should hold coffee & its derivatives in reserve assets?

Bitcoin has less than 20 years of price action, and it started trading at a negligent price. Gold has been money for over 5000 years and its earliest recorded price per ounce is of ≈100 days of labor

A better question is whether Bitcoin will continue to consistently outperform gold over the next 20 years. *Consistency* is key - it must be at least a store of value, including shorter-term. If you get caught in the typical >50% price drops - you may pay a high opportunity cost.

It's not just whether Bitcoin will increase more in price than gold in the next 20 years, but also how severe and long-lasting Bitcoin's corrections are.

Imagine you buy Bitcoin today and it goes into a bear market with a significant value loss in the next 4 years. In those 4 years - many investment opportunities may arise, such as in real estate, equities, commodities or bonds. If your capital is locked in Bitcoin throughout that period - that's an opportunity cost.

Gold doesn't come with those shortcomings. There is a reason why all world reserve currencies started on a gold and/or silver standards.

There is no free lunch in the markets. Higher return is almost unanimously correlated with higher risk. Quantitatively Bitcoin is high risk- it's not a matter of opinion.

This doesn't mean that Bitcoin is a bad idea, but it also doesn't mean that Bitcoin is a better idea than gold. It does, however mean, that Bitcoin isn't a replacement for gold.

And now you understand what makes gold so special. You don't have to believe me - believe centuries of price action and human history.

More Bitcoin has been seized than Gold

If you think that Bitcoin is harder to seize than gold, you are probably wrong. At least according to the data.

In the history of Bitcoin's existence, much much more Bitcoin has been seized than Gold. You don't need to compromise cryptographic primitives to seize Bitcoin.

Apparently this isn't a very well known fact in the Bitcoin Maxi world 😄

Why would a Central Bank hold Bitcoin in reserves?

1. Even assuming that Bitcoin is an inflation hedge - it still doesn't mean that Central Banks should hold it. What would be the purpose of that? Central Banks are not commercial institutions - they hold assets for very specific reasons (e.g. FX rate stabilization).

2. You may have misunderstood me. I said that Bitcoin isn't money - but that by itself doesn't mean that Central Banks shouldn't hold it. FIAT currencies aren't money either. Neither are government bonds. BUT - those bonds or currencies generally don't crash >50% on cycle tops. So it's the fact that it's not money, combined with the other points I mentioned here and in the article that i linked

3. Kaspa isn't money. It certainly hasn't been long enough to be classified as money, nor it has enough intrinsic value. It carries the same set of technology risks as other cryptocurrencies- and even without looking at the chart - I can tell you that it's correlated to the rest of the crypto market.

I am a big fan of crypto, but we need to keep it real 😄

Thousands of accounts on X with large following shill Bitcoin/Crypto non-stop, with little reasoning behind it. They either do it for pay, engagement or a mix of both.

You don't have to look far - usually just search for "gold" on their profile and you'll find something like this (see screenshot).

If you want to understand how Bitcoin is not gold, it will never be gold, and it will never replace gold - read this article: https://illya.sh/threads/bitcoin-needs-gold-gold-doesnt-need-bitcoin.html

Is the rotation from Gold to Bitcoin in the room with us? 😉

Over the past 2 weeks hundreds of X accounts with large following have been posting about an imminent rotation from gold to Bitcoin, once gold reaches a correction level.

Their main argument seemed to be based on Bitcoin's historic price correlation - essentially "here are some select occurrences from the past where this happened, so it will happen now". Many of them went as far as claiming that gold has topped in this cycle (it hasn't).

Local top for gold was reached, but rotation didn't happen. As I've been alluding to over this same timeframe - the reality in financial market is seldom this simplistic.

In general, you should be very wary of market thesis that are too abstract, or fail to consider the macro picture.

How exactly does Bitcoin break U.S. dollar control, when >90% of Bitcoin's buying volume is USD-derived (including stablecoins)?

All reserve currencies achieved reserve status under gold or silver standards

And some still think that Bitcoin will be the next reserve currency. Judging by the actions of the sovereigns positioning their local monetary units for reserve currency position that is highly unlikely 😁

More specifically, China & BRICS are heavily buying gold, and they have openly discussed partly gold-backed currencies several times. In the EU, the ECB is very clear on their stance against adding Bitcoin to their reserves.

Bitcoin doesn't exhibit the characteristics necessary for a reserve currency. If you believe that it does, then you need to start by explaining how it would integrate into the current financial system. Do not forget to consider Central Banks, wholesale debt markets and refinancing cycles. A potential role that Bitcoin may take is as collateral, for example in money markets. The problem is, that you will be inadvertently running into very large haircuts and low LTVs. So unless Bitcoin concisely keeps yielding higher highs, you'd be better off by using higher-quality collateral, such as government bonds or even equities.

Another point comes down to risk. The more Bitcoin is used the more risky it becomes. Sure, you can say that the network also growth with usage, but in case Central Banks start holding Bitcoin - it becomes a geopolitical liability. It will become a matter of time before disruptive attack and compromise of private keys. Also, >90% of the buy volume of Bitcoin is in USD or its derivatives, such as USD-pegged stablecoins. So it's USD that's mostly invested there, not euros, renminbi or others. This makes Bitcoin extremely exposed to USD currency risk.

Gold and silver have a much more modest exposure to the risks above. You don’t have to believe me - just look at the history. Since 500 BCE it's mostly been gold and/or silver - and Bitcoin doesn't change that.

Accounts on X that relentlessly promote the idea of Bitcoin being money, and better money than gold fail to address these points.

but Bitcoin is also taxed and surveilled - the ledger is public and attributable 😄

most of Bitcoin's trading volume is in central-bank issued currencies. actually, it's mostly the USD - so Bitcoin is highly susceptible to U.S. currency risk

so yes, bitcoin is risky. that's the premise of no free lunch in financial markets 😄

if AI will want something it would be gold, not Bitcoin

AI can create another Bitcoin protocol and program the node logic, but AI won't be able to create gold

AI will also need to gold for the signal connectors in the electronics that the AI runs on

It's chemistry/physics vs computer code. You can write new code, but you can't create new Au (without it being very, very expensive)

Bitcoin needs gold. Gold doesn't need Bitcoin

TL;DR: Bitcoin is a protocol that runs on computers. Computers rely heavily on electronics. Gold is widely used in electronics. Bitcoin depends on gold.

Bitcoin quite literally runs on gold. ≈99% of physical machines hosting Bitcoin nodes contain at least trace amounts of gold. The same is true for the overall electric grid infrastructure that delivers electricity to Bitcoin nodes.

While gold isn't strictly required for electronics, it's widely used to due to organic demand. Gold's ROI in signal connectors is very strong, because you need little gold to mitigate a large amount of failure risk. All of this is due to the unique chemical nature of gold, which alongside its scarcity is at the base of gold's intrinsic value.

Gold is a chemical element in the periodic table - its atomic symbol is Au. Physical gold is essentially Au atoms connected to other Au atoms in a cubic pattern. This structure is very stable, and at the same time soft/malleable. Gold is used in electronics because it provides stable, low and predictable contact resistance and corrosion immunity at low currents/voltages, including under vibration.

Electronics is of course just one of the use-cases of gold. Among others, it has been used as money for more than 5000 years. Even if Bitcoin does become money in the future, it won't be the only form of money (plus, you can always tokenize gold!). And especially not for the near long-term future.

Digital currencies are at their infancy, and they almost always depend on stable electrical grid and network connection to function properly. This includes Bitcoin. Gold doesn't have this risk. It was used as money before electricity and networks existed, and it can continue to be used alongside them

This is not to say that Bitcoin is a bad idea, but gold has a higher intrinsic value by definition

yes, you always have access to the Bitcoin network

until the electric grid is disrupted, a sufficiently strong solar storm occurs, a denial of service attack happens, ...

i can continue the list

Bitcoin isn't private - at best it's anonymous

and this is by design. it's just cryptography/math - not much to argue about

but gold transactions aren't private either. most of the time they're not even anonymous. you must have some level of trust with the counterparty - either directly or via intermediary. a lot of the times this is required by law

at retail level, there is much more privacy and anonymity with Bitcoin that with gold

gold has clearly more intrinsic value than bitcoin, but bitcoin is one of the most significant advancements in money. although bitcoin isn't money 😄

my vibe meter on Bitcoin is off the charts 📈*

the algorithm on X has been pushing a lot of pro-BTC content over the past month, and it's becoming more and more irrational:

accounts with millions of followers recycling 2024 news about "new" gold reserves in China, false news about China legalizing Bitcoin and calls for gold going down to $2000

every pro-Bitcoin account seems to be calling a long-term gold top (LOL!) and heavy rotation into Bitcoin. actually a lot of BTC shill content is about BTC being better than gold - and the arguments for it aren't very sound. i've written several posts explaining this. BTC crowd seems very obsessed about gold - especially when it comes to showing how it's inferior to Bitcoin. Bitcoin is not gold - and it will never be gold - they're very different assets. that doesn't mean that BTC ownership is a bad idea - but it's important important to approach it rationally

a large part of this seems coordinated/paid campaigns. liquidity always needs an exit

so Bitcoin should continue with some more downside in the near future

* this sentiment is based on vibes, but it's backed by technicals & fundamentals at its base. you can find in-depth explanations in my past posts and threads

sell your gold and buy Bitcoin

dealers/market makers need exit liquidity

central banks need a lower purchase price

you've been warned! 😄

BTC went from $0.004 to $110,000 USD in 16 years, but gold was never this cheap in over 5000 years

Going back to the start of recorded price systems - gold's starting price per gram is ≈100 days of labor! This was in 2112 BCE, which was ≈4K years ago

So using earliest records of starting price - 1g of gold would cost ≈25K$ is today's USD 🤯 NOTE: this is an imprecise estimation - but it's useful to bring the gold vs bitcoin price increase argument in perspective. During most of gold's USD history its price has been fixed by the government/law.

Will Bitcoin be here in 5K years? No - not in its current form. Gold (Au) hasn't changed in 13 billion years

Bitcoin promo accounts love to compare BTC to gold, and they frequently cite that BTC is up much more than gold over the last 16 years. The number is big - from its inception Bitcoin is up millionth of percent

What the pro-crypto accounts fail to point out is that mathematically their conclusions are misleading. They almost always use USD as the base currency for comparison, but ignore the fact that gold was used as money several millennia before U.S. was even conceived. As such, such comparisons fail short

They also seem to selectively omit the massive volatility - gold doesn't go down 80% every other day/cycle top

The gold prices here I computed are estimates - don't take them as hard quantitive data. Read this in the context of comparing the price of gold and Bitcoin. If someone's argument is that Bitcoin is better than gold because it had a higher percentual return in 16 years - it likely lacks substance

1. Bitcoin is not money. Calling it money won't make it money

2. Digital currency designs existed before bitcoin - and double spending wasn't an unsolvable problem

3. Again, bitcoin is not money and all it takes is for your government to declare it illicit to censor it. Bitcoin is not private - you will be tracked if needed & in many ways it's much easier than with banks

I'm a big fan of Bitcoin, DeFi & crypto in general, but that doesn't mean reality should be skewed

Remember that lot of accounts posting non-stop pro-BTC/crypto content are paid for it - directly or indirectly. Another large portion of them are automated/bots.

Keep it real 😎

now crypto twitter seems to think that gold & silver have topped 😂

i don't think CT understands what gold & silver are

people are calling Christine Lagarde ignorant on Bitcoin, but don't explain how

how exactly are her statements on Bitcoin ignorant? it's not nice to insult someone, and it certainly doesn't explain how Bitcoin has the same amount and class of intrinsic value as gold - a commodity that has been money for over 5K years

what is even the purpose of a central bank holding BTC in their balance sheet today? speculative investments are not a part of their mandates and moving in that direction would be contradictory to their legally established goals

commercial banking is not the same as central banking

central banks have rejected holding Bitcoin in their reserves including Fed, ECB, PBoC and many others

what would even be the purpose of a central bank holding BTC on their balance sheet? so that they can stabilize the value of the currency against Bitcoin? what would be the practical benefit from it now?

cross-border crypto trade in non-stablecoins is negligible. Bitcoin is extremely volatile, which would make central-bank issued currency more volatile - this goes exactly against the direct mandate of most central banks - price stability.

a more volatile currency will also lead to a more volatile bond market, which will make government funding more volatile, and thus a high risk/uncertain economy

and i'm not even going to touch on the security risks. okay, maybe briefly 😄:

➖ governments are one of the only entities that can realistically perform a successful 51% attack on Bitcoin. well, with central banks owning BTC will make such attacks much more attractive - including at the geopolitical level. the same goes for denial of service family of attacks

➖ what if the central bank's wallets get hacked/compromised? i'm not talking about quantum computers breaking RSA, but operational level mistake or compromise

so for the next 10 years, I view central banks holding Bitcoin on their balance sheet as a negative sign for their currency. of course, the protocol and the bitcoin network will evolve/change over time, and with so may my stance

i believe cryptocurrencies, and more specifically distributed layer technologies/blockchain architectures can bring immense value to our financial system as a whole, but that doesn't mean that we should have central banks speculating on that today. it makes much more sense to increase gold reserves instead

virtually every corporation that accepts Ethereum/Bitcoin for payments doesn't actually process the payment in crypto

they immediately covert it to USD or another FIAT, and not actually hold the BTC, ETH, etc

the convertion is generally done via an intermediary, so the company you're buying never even touch or care about the crypto asset. they want the same government-backed currencies that we use now

the intermediary will also generally charge a fee, around ≈1% of the transaction value. so buying directly with crypto is likely to be more expensive than directly with FIAT. if you just sell the crypto for FIAT and pay directly in USD, EUR, etc it will likely be cheaper. so what's the point of paying more?

don't be fooled by headlines or articles that suggest otherwise