Author: Glenn Hodl

Translation: Azuma, Odaily Planet Daily

Editor’s Note: The trends in the cryptocurrency market remain elusive, but Microstrategy (MSTR), which is strongly tied to Bitcoin, recently reached a historic high in its stock price—U.S. stock market data shows that on October 9, MSTR approached the $200 mark, peaking at $198.35.

Recently, overseas KOL Glenn Hodl provided his analysis regarding Microstrategy's strength. Glenn believes that even if Bitcoin's price does not increase further, Microstrategy can create a sustainable "perpetual motion machine" to continuously boost its market value by leveraging the differences in valuation models for commodities and companies, ultimately making Microstrategy the most valuable company in the world.

Below is the original content by Glenn.

Microstrategy's CEO Michael Saylor seems to have found an economic model akin to a "perpetual motion machine."

I am not sure if this mechanism can be stopped, but if it continues to operate, Microstrategy is very likely to become the most valuable company in the world.

The reason is that the way a company is valued is fundamentally different from the way commodities like Bitcoin are valued, which creates a paradox in the market when valuing Microstrategy (MSTR)—commodities are always traded at current prices; whereas companies are traded at discounted prices based on their future value.

Therefore, if you believe that Bitcoin will become more valuable at some point in the future, then the Bitcoin held by Microstrategy will also become and should become more valuable.

This could create a "second-order effect," where Microstrategy can continuously capture this premium expectation, enhancing the attractiveness of its narrative and driving its market value higher.

Some readers may still not fully understand, so here is a static, super-simplified version.

Now there is a company that has issued 10 shares of stock and holds 10 Bitcoins.

Assuming the current spot price of Bitcoin is $2, and the market expects it to rise to at least $4. According to the valuation model for companies (traded at a discounted price based on future value, assuming a discount rate of 50%), the company's stock price would be $3, which is a 50% premium over its net asset value.

The company's owner sees an opportunity here, so he issues 2 new shares at market price and uses the $6 to buy 3 Bitcoins from the market.

Now, this company has issued a total of 12 shares and holds 13 Bitcoins, changing the ratio of "Bitcoin holdings / shares issued" from 1:1 to 1.08:1.

The key point is that the company's market value is now $36, and the treasury value is $26, the premium rate has reduced to 38% (which means the discount rate has increased to 62%), but the market will still value the company at a 50% discount based on future value, which will push the company's market value up to $39, corresponding to a stock price of $3.25.

After the premium is restored, the company's owner can repeat the above process, issuing 2 new shares at market price and using the $6.5 to buy 3.25 Bitcoins from the market.

Now, the shares issued have reached 14, and Bitcoin holdings have increased to 16.25, changing the ratio of "Bitcoin holdings / shares issued" from 1.08:1 to 1.16:1.

Subsequently, as the market again restores the premium condition by valuing the company at a 50% discount based on future value, the company's market value will be pushed up to $48.75, corresponding to a stock price slightly below $3.5.

So far, although the price of Bitcoin has not changed, the premium rate has returned to 50%, but the ratio of "Bitcoin holdings / shares issued" has increased by 16%, and the stock price has also increased by about 16%.

At this point, the prototype of a monster has been born. The company can continuously repeat the above process, using the market's differences in valuation models for commodities and companies to create a perpetual motion machine, while the market will continuously raise its valuation, partly because the future value of Bitcoin will increase, and partly because the company's "Bitcoin holdings / shares issued" ratio is also continuously increasing.

Microstrategy is this monster, and it is expected to become the most valuable company.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。