Vidal Ramirez, CFP®

[Adam Livingston @AdamBLiv]

🔥MONSTER BITCOIN BOTTOM SIGNAL🔥

45.63% of Bitcoin's supply is in profit.

The last time we were at this level was November 13, 2022.

From that date Bitcoin went from $16,324 to:

$21,772 or 1.33x in 3 months
$26,777 or 1.64x in 6 months
$29,300 or 1.79x in 9 months
$36,748 or 2.23x in 12 months
$62,937 or 3.86x in 18 months
$90,422 or 5.54x in 24 months

If history rhymes, those same multiples correspond to:

3 mo: $78k Bitcoin
6 mo: $96k Bitcoin
9 mo: $105k Bitcoin
12 mo: $131k Bitcoin
18 mo: $226k Bitcoin
24 mo: $324k Bitcoin

Absurdly bullish.

[Vivek Sen @Vivek4real_]

BREAKING: COINBASE JUST ANNIUNCED LIVE ON CNBC THAT 40 COUNTRIES ARE NOW BUYING BITCOIN FOR THEIR NATIONAL RESERVES

THEY KNOW WHAT’S COMING 🚀

[Vidal Ramirez, CFP® @vidalramirez]

@LayahHeilpern https://t.co/qgHIWaoewB

[Bitcoin Magazine @BitcoinMagazine]

JUST IN: Coinbase's John D'Agostino tells CNBC "we've seen over 40 countries commit to buying bitcoin in some fashion for their national balance sheets" 👀

"For those of us who have the luxury of being on the inside, all we're seeing is steady growth" 🚀

[Vidal Ramirez, CFP® @vidalramirez]

@CJ_Bitcoin @Strategy Focus on generating cash flow at enterprise software biz; quit changing rules, i.e. original language said issuance below 2.5x mNAV would only be used to: 1 Pay interest on debt. 2. Fund preferred dividends..

[Vidal Ramirez, CFP® @vidalramirez]

@edstromandrew Many critics assume being right and being right soon are the same thing

[Vidal Ramirez, CFP® @vidalramirez]

@nic_carter Strategy has $50Bn in BTC reserves against $6.7 Bn in debt and $1.7 Bn in annual preferred obligations - approx 6x asset coverage - most CCC have well below 1x coverage

[Vidal Ramirez, CFP® @vidalramirez]

@phongle Orange dots every week not necessary. It’s ok, let the mnav grow. Focus on growing the business software cash flow generation too!

[Vidal Ramirez, CFP® @vidalramirez]

@Croesus_BTC Is there any chance the buyer of STRC at $82 was MSTR ATM and if so, does that change your thesis?

[Matt Cole @ColeMacro]

Today was the most difficult day in the history of Digital Credit.

$STRC traded as low as $82.50 before recovering sharply. $SATA traded from par down to the low 90s before also rebounding. It was a difficult day for many investors.

What happened today was a leverage liquidation event, not a deterioration in underlying credit quality.

There is an old saying in income markets that the road to hell is paved with carry.

When investors discover an asset that offers attractive yields, relatively low volatility, and strong underlying credit characteristics, many eventually decide that owning it is not enough. They borrow against it. They lever it. They attempt to enhance the carry.

That works until it doesn't.

When markets move against leveraged holders, forced selling can create a cascade. Prices fall, margin calls increase, more selling occurs, and the cycle feeds on itself. The selling becomes disconnected from fundamentals and becomes driven by balance sheet constraints.

We have seen this many times before in traditional finance. Some of the largest hedge fund failures in history involved highly leveraged positions in U.S. Treasuries. Not because Treasuries suddenly became poor credits, but because investors became overextended while trying to earn additional yield on assets that appeared safe and stable.

That is the dynamic that played out today in Digital Credit.

Importantly, the creditworthiness of the issuers remains strong.

At @Strive, our dividend reserves remain intact. Our company is not under stress. We remain well positioned to meet our obligations and continue executing our strategy. The underlying credit profile remains substantially unchanged from where it was before today's volatility.

One of the lessons markets teach repeatedly is that leverage flushes are not necessarily evidence of weak collateral. In many cases, they occur precisely because the underlying collateral is viewed as stable enough to encourage excessive leverage in the first place.

In that sense, today's events were difficult for some investors, but they were also instructive.

Digital Credit is still in its infancy. It is better for the market to experience and learn from these dynamics now, while the market remains relatively small, than years from now when the market is many times larger. Investors, issuers, and market participants all benefit from understanding the risks associated with leverage and liquidity before the asset class reaches full scale.

No one knows with certainty whether today's lows will ultimately prove to be the bottom.

What is clear is that there was substantial demand at those prices. Both $STRC and $SATA experienced significant buying interest off their intraday lows, resulting in sharp recoveries. That price action reflects meaningful demand entering the market at lower levels and is an encouraging sign for the health of the asset class.

A liquidation event and a credit event are not the same thing.

The price action today did not change my conviction in the long-term opportunity for Digital Credit. If anything, it reinforced my belief that we are building an entirely new category of financial instrument that will experience many of the same growing pains that other large fixed income markets experienced before reaching maturity.

The volatility was uncomfortable for many participants.

The lesson will prove valuable.

Stay calm. Focus on fundamentals. Markets have a way of working through excesses, and when they do, stronger foundations are often left behind.

[Vidal Ramirez, CFP® @vidalramirez]

You're not delusional. You're early and you're in pain, which feels identical to being wrong but isn't. The people who held bitcoin through the 2022 crash from $69k to $16k — an 77% drawdown — and didn't sell are sitting on life-changing gains today even at $62k. The scarcity thesis didn't break at $16k. It didn't break at $30k. It's not breaking at $62k.

The hype around SPCX will ease. Capital will rotate. Bitcoin will be there waiting — still at 21 million coins, still mathematically scarce, still running on thousands of nodes. It always has been.

[Vidal Ramirez, CFP® @vidalramirez]

@Croesus_BTC Great analysis - repost 💪

[Jesse Myers @Croesus_BTC]

STRC down to $82.6 today. Here's my read:

1. Strategy is fine. If everything stays as is, they can pay STRC dividends for 32 years. If BTC appreciates at ~2% CAGR, they can pay dividends indefinitely.

2. Why the sell-off? This appears to be a liquidation cascade.

Over the last 6 months, the narrative became that STRC volatility was reducing, and price began to spend all its time in $99-100 range.

This invites leverage. If you expect the price to always be north of $95, you can take on 20x leverage with your portfolio to buy more STRC and dramatically increase the yield on your portfolio.

This works great, until it doesn't.

STRC is designed as a free-market asset. When attention shifted to SATA and STRC price flagged, it may have raised the attention of opportunistic short-selling hedge funds.

By shorting aggressively, they could push the price down and start triggering margin calls and liquidations from folks who aggressively levered up their STRC positions.

The price action today is a clear liquidation cascade, rapidly pushing prices lower, in turn triggering additional liquidations.

3.
What happens now? The market will heal itself.

Opportunistic hedge funds will recognize that this is a firesale and the fundamentals are unchanged for STRC and step in as buyers. Shorts will close, becoming buyers. Individuals are getting a tremendous entry price for long-term holding STRC shares.

Buyers at this level will get ~13.7% effective yield. If STRC trades back to $100 and they sell, they get an easy +18% return.

4.
What will Strategy do?

Strategy will likely increase the dividend rate on June 30 - maybe to 11.75% but possibly to 12%. Buyers at the current price level then would get 14.2% effective yield from that point forward.

Strategy may also step in to buy STRC shares back. They could do this by issuing new shares of MSTR (currently at 1.14 mNAV) or by taking on traditional debt and deploying those funds to buy discounted STRC shares on the market.

If/when STRC trades back to $100, Strategy could then re-issue those STRC shares. The ~$15 delta per share could be used to buy BTC as pure accretion to MSTR holders, with no net change to amplification.

No doubt that Saylor has already at least considered this, and it wouldn't surprise me if they're currently doing this.

5.
In summary...

The market is freaked out that this depeg is like Terra/Luna... but this is not an asset like that. Strategy's balance sheet determines whether STRC continues to receive dividend payments... and Strategy's balance sheet is completely unchanged.

This is a leverage wipeout.

From this, the market will learn that Digital Credit is mostly very low volatility. But because it is a free market asset, the longer that a Digital Credit instrument trades within a tight range to par... the more leverage will inevitably pile up as people get greedy.

And that creates the conditions for a leverage wipeout depeg. Following that, the instrument will make its way back to par value as the market heals itself and recognizes that the dividend payments will continue uninterrupted because the issuer's balance sheet is unaffected.

[Vidal Ramirez, CFP® @vidalramirez]

@ZynxBTC A rise in Bitcoin price would help tremendously

[Vidal Ramirez, CFP® @vidalramirez]

@dgt10011 SpaceX, a Co with $18 Bn in Revenue, will have a valuation of ~$1.7Tn, 50% more than the entire Bitcoin market cap. Clear which asset is undervalued.

[Vidal Ramirez, CFP® @vidalramirez]

@IIICapital SpaceX, a Co with $18 Bn in Revenue, will have a valuation of ~$1.7Tn, 50% more than the entire Bitcoin market cap. Clear which asset is undervalued.

[Vidal Ramirez, CFP® @vidalramirez]

@PunterJeff Post some orange dots 🍊

[darren criss daily @dcrissdaily]

“Broadway Magic, a Surprise $5 Million Gift and a Speakeasy Finish Power Hobby Center’s Remarkable Houston Night”

https://t.co/ToJuQ53f3o

[darren criss daily @dcrissdaily]

“it was such an honor to perform with @/darrencriss on my prom night. this has genuinely been the https://t.co/yUCN053OvP.ever. i'm so thankful for everything 🥹🥹”
Via Bianca Ramirez on IG

[Vidal Ramirez, CFP® @vidalramirez]

@dcrissdaily #proudfather - thank you @hobbycenter for Bianca’s opportunity