Chaos Ledger

Next Generation BTC Credit Asset Manager

[Chaos Ledger @ChaosLedger]

White paper Substack link: https://t.co/z0KY7e0bym

[Chaos Ledger @ChaosLedger]

$STRC is the most interesting instrument in @Strategy’s capital structure.

We demonstrated in our white paper that preferred equity is the most effective form of leverage for a BTC-TC seeking to accumulate more Bitcoin. We also argue that a BTC-TC with multiple preferred share classes can access capital across a wider range of market environments, which should support a higher mNAV than peers with fewer financing tools.

$STRC is the clearest expression of this idea.

While other BTC-TCs are sidelined after a 50% peak-to-trough drawdown, @Saylor is issuing hundreds of millions of $ worth of $STRC weekly. The reason is simple: the variable rate mechanism allows him to find the market clearing dividend rate needed to reopen the ATM.

In our framework, having a $STRC-like instrument alone is enough to place a BTC-TC in Level 3 of the Leverage Premium hierarchy – a capital markets advantage that should translate into a durable long-term mNAV premium (that said, longer-duration instruments still matter: when the yield curve favors term issuance, issuing something $STRF-like can be more accretive).

Check out our white paper to learn more about how preferred equity drives value accumulation for BTC-TCs.

[Chaos Ledger @ChaosLedger]

@RoaringRagnar Our #whitepaper decomposes a BTC-TC’s fair mNAV into 4 premiums: regulatory, accretion, leverage, and speculative (residual). The astute investor would know how Metaplanet stacks up against the rest of the pack

[Chaos Ledger @ChaosLedger]

For those who don’t have a few hours to read our Whitepaper, here is the TL:DR version:

The evolving capital structures of BTC-TCs, with growing layers of preferred equity and other senior liabilities, call for new frameworks to assess the economics accruing to common shareholders, while the fixed-income instruments themselves demand a rigorous credit analytical framework.

If you are a common equity investor: our suite of Adjusted metrics show you the true residual value that is left after accounting for more senior claims on the balance sheet

If you are a credit investor: we rate a BTC-backed credit instrument’s risk based on its 1) overcollateralization and 2) ability to tap the capital markets accretively to fund dividend payments

Bottom line: many of the headline metrics in use today, such as BTC Yield and BTC per share, were developed when BTC-TCs had relatively simple capital structures. They remain useful reference points, but our framework is more precise and better isolates the economics that matter

[Chaos Ledger @ChaosLedger]

One of the many questions we received since publishing our Whitepaper is why we do not include a BTC-TC's cash when computing Adjusted NAV.

If the cash belongs to a cash reserve to fund future dividend payments, that technically belongs to the senior claims and the common should not also benefit from it. If it is a sizable amount of cash not earmarked for dividend payments and is just lying there, well, then it should be used to buy #bitcoin

[Chaos Ledger @ChaosLedger]

Our full paper is public on Substack:
https://t.co/RxPJD0udZX

For more inquiries about our work at Chaos Ledger, please contact us at [email protected] or visit our website https://t.co/cRWBwDpdqC

[Chaos Ledger @ChaosLedger]

@TimoKoskela6 Thank you Timo. Feel free to cite in your paper - looking forward to reading it

[Chaos Ledger @ChaosLedger]

1/

Bitcoin Treasury Companies (BTC-TCs) are quickly emerging as a new asset class.

~200 public companies now hold ~1.1M BTC (~5% of supply) on their balance sheets.

Yet investors still lack a rigorous framework for valuing these equities and the BTC-backed credit they issue.

Our new paper proposes one. 🧵

[Chaos Ledger @ChaosLedger]

@chcbearsfan Great stuff

[Chaos Ledger @ChaosLedger]

@btc_overflow Suggest you checking out our whitepaper which discusses our suite of Adjusted metrics and conditions which govern the true economics of BTC-TC's: https://t.co/z0KY7e0bym

[Chaos Ledger @ChaosLedger]

@RoaringRagnar Thank you for the kind words!

[Chaos Ledger @ChaosLedger]

@RoaringRagnar @Bigpicture123 Suggest you checking out our whitepaper which discusses the downsides of using normal mNAV - we propose our suite of Adjusted metrics which capture the true economics of BTC-TC's: https://t.co/RxPJD0udZX…

[Chaos Ledger @ChaosLedger]

@Rajatsoni @saylor Given record volumes on $STRC which is expected to climb further and the seasoning of the product which builds investor confidence, there will be enough big institutions arbing whenever $STRC falls below $100. Don’t think @saylor needs to do it himself.

[Chaos Ledger @ChaosLedger]

Expecting record numbers from $STRC tomorrow
@saylor @phongle

[Chaos Ledger @ChaosLedger]

#Bitcoin
#BitcoinTreasury
#BitcoinCredit
#DigitalAssets
#CapitalMarkets

[Chaos Ledger @ChaosLedger]

Our full paper is public on Substack:
https://t.co/RxPJD0udZX

For more inquiries about our work at Chaos Ledger, please contact us at [email protected] or visit our website https://t.co/cRWBwDpdqC