The Bitcoin Strategy Sailora is a bomb beat in time: experts

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The last move in Michael Saylor to finance more purchases Bitcoin took a discussion of the sustainability of their approach to high roses. The company is now named the strategy (earlier microstratics) announced that new constant preferred supplies, strf (“strife”), at 10% of the annual dividend. While some see this as an invention to accumulate more BTC, others warn that they can become obligations in cash, if Bitcoin prices fall.

Can it say that the next catalyst Bitcoin Bear Market?

In KS, the strategy has announced the creation of STRF (Strife), which described as “new constant preferred action, available to institutional investors and selected noninstitutional investors.” In his statement, the company explained that the income would go to general corporate purposes – including working capital – “and the acquisition of bitcoin” and although it emphasized that it emphasized “subject to the market and other conditions.”

According to the strategy, the STRF has cumulative dividends of 10% per annum, and the first cash dividend scheduled for 30. June 2025. years, and then each quarter afterwards. Observers quickly noticed so that such a great payment could be burdened by the company’s resources, given that his balance sheet is very tilted towards Bitcoin not traditional income Streams.

Among the early critics was Whalepanda (@whalepanda), host magical crippto friends youtube channel with Riccardo Spagni, Samson Kos and Charlie Lee. He overturn 10% dividends, which could amount to 50 million dollars of annual payments if the strategy sets $ 500 million, it is too large in view of the company’s structure:
“I said that before Realor would bring the next Badcoin bear market. This looks desperate to $ 500 million in $ 50 million in cash … They don’t have that money … don’t have that money.”

Another vocal critic, Simon Dikon-former banker is the Bitcoin Investor converted familiar in banking platforms KrakenBitfinek and bitstamp-draw The sharp parallel between the bold strategy strategy and the infamous collapse of long-term capital management (LTCM) in the late 1990s. Although not equating two scenarios, Dixon claimed that the offer of such a high fixed dividend from “insufficient dollar income” looked like a “risk as follows”.

Warned: “Announcement of a strategic permanent 10% paid in dollars – is a risk onto Bitcoin. If this ship is sinking, which one is tonel, which is tonel, which this ship was tone, that this ship was tone, nationalization could becomes a strategic move. ” This ship tone, nationalization could not think of Bitcoin on Bitcoin. “

Not everyone shares holes of the prospect. Some figures of industry insist that Sailor’s record records in growing strategic BTC reserves – and the relative simplicity of their balance sheet compared to LTCM-offers a significant pillow. David Bailey, General Manager of Btc Inc., claimed that Sailora’s advertisement should not be lowered: “Sailor literally has more skin than anyone else, don’t buy it, just don’t buy it.”

He invited critics as “ungritable”, underlining how advertising for public advocacy and corporate purchases made the main opportunity and significant inflows in Bitcoin. Bitcoin analyst Dylan Leklair also rejected the comparison of LTCM, calling “literally nothing like LTCM” and implies that the BTC balance is not the same system risk as you hosts the required Hedge fund.

Preston Pish, co-founder of the investor podcast network, offered Snairly take. While expressing reserves regarding the new issue of issuance why the strategy did not use “The Previous Preferred Issuance which has 8% of dividend yields and option to pay common or cash “- the direct parallel with LTCM as” over the upper laughter “.

Pish floured rough numbers that suggests that even if Bitcoin should roll 70% from its current levels, the strategy could theoretically maintain dividend payments and coupons more than a decade. He wrote:

“If the Bitcoin price drops 70% from here, it still has $ 12 billion in annual payments (dividends and coupons in BTC. Now this math is in BTC. But I think your claim is hyperbolika. “

At the time of pressing, BTC traded $ 83,454.

Featured image created with DALL.E, chart from TradingView.com

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