Why is mNAV of Bitcoin treasury companies important, but not in the way you think it is?
Individual human actions are unpredictable by definition. However, actions of groups of individuals are much easier to predict and it shows in typical and cyclical market cycles.
Hyped retail investors will jump on a band wagon of a random Bitcoin treasury company without understanding the fundamentals of market forces. They'll buy a stock of a company that trades at ridiculous mNAV hoping to ride the wave on a thrill and euphoria but without understanding that MARKET FORCES WILL ALWATS ACHIEVE NATURAL EQUILIBRIUM WITH TIME.
As time progresses the mNAV of any Bitcoin treasury company will always trend towards one plus free cash flow the company is able to attain from regular operating business (if it has one and if it is profitable).
But, this is not easy to understand because we are psychologically wired to fall under the influence of our emotions and we need to "keep up with Joneses".
Don't fall for it. The underlaying value of any of these companies is the value of Bitcoin, so for most people it is much safer and easier to invest in Bitcoin instead of hyped Bitcoin treasury company.
Let me give an example.
Metaplanet stock has plummeted since June by more that 50% while Bitcoin is at the same level it has been in June as is on a verge to break out. So, if you invested in #3350 only two months ago, just because you favorite influencer or podcaster shilled it (for which they are probably paid) you have lost 50% of your capital.
Sure you could have made 20x if you invested in Metaplanet in October 2024 but why didn't you? Because there was no hype that you could notice so the opportunity is missed.
Thank you for the attention to this matter and have a great day!
Hyped retail investors will jump on a band wagon of a random Bitcoin treasury company without understanding the fundamentals of market forces. They'll buy a stock of a company that trades at ridiculous mNAV hoping to ride the wave on a thrill and euphoria but without understanding that MARKET FORCES WILL ALWATS ACHIEVE NATURAL EQUILIBRIUM WITH TIME.
As time progresses the mNAV of any Bitcoin treasury company will always trend towards one plus free cash flow the company is able to attain from regular operating business (if it has one and if it is profitable).
But, this is not easy to understand because we are psychologically wired to fall under the influence of our emotions and we need to "keep up with Joneses".
Don't fall for it. The underlaying value of any of these companies is the value of Bitcoin, so for most people it is much safer and easier to invest in Bitcoin instead of hyped Bitcoin treasury company.
Let me give an example.
Metaplanet stock has plummeted since June by more that 50% while Bitcoin is at the same level it has been in June as is on a verge to break out. So, if you invested in #3350 only two months ago, just because you favorite influencer or podcaster shilled it (for which they are probably paid) you have lost 50% of your capital.
Sure you could have made 20x if you invested in Metaplanet in October 2024 but why didn't you? Because there was no hype that you could notice so the opportunity is missed.
Thank you for the attention to this matter and have a great day!