Author: Alexander S. Blume, Forbes Compiler: Saoirse, Foresight News

Although I really don’t want to spend too much energy thinking about Strategy and its repeatedly changing development goals, product lines and external caliber, the company’s treasury asset allocation strategy has become the core influencing factor of Bitcoin’s short-term trend, so it deserves careful analysis. During Strategy’s earnings call this week, executive chairman Michael Saylor made a 180-degree turn and now stated that the company may consider selling off the Bitcoin held on its balance sheet under certain circumstances. The central question is: What prompted his current thinking? And who would want to believe this person now?

Obviously, some people still choose to continue to trust him. Cult-style leaders usually have these characteristics: arrogance and grandiosity, shaping a persona that never makes mistakes, setting up loyalty tests, monopolizing public opinion narratives, being personally centralized and arbitrary, implementing double standards for accountability, and at the same time having a strong personality. Now the company's planning and external caliber have changed again, and Strategy's fans are still trying hard to find reasons to justify this change. People have to admit that this has formed a blind following of believers.

It is easy for the outside world to see that Strategy holds more than 800,000 Bitcoins on its books and spends billions of dollars to continue to add positions almost every week. They take it for granted that this company has unlimited room for operation and full growth potential. The company's consistent value logic is to bind Bitcoin asset exposure and then add leverage to seek excess returns. Saylor has publicly emphasized the importance of holding on to Bitcoin many times in the past. But the reality is very different: Over the past year, Strategy’s stock price has plummeted 53%, while Bitcoin itself has only fallen 17%.

Strategy shares are down more than 53% in the past 12 months

Despite the sharp drop in stock prices, Strategy produced its own "Bitcoin Per Share" growth data to prove that there are no problems with its operations. But the correlation between this self-created indicator and stock prices is indirect at best. No one cares about the so-called Bitcoin per share metric anymore when it’s down three times as much as the underlying asset.

The valuation logic of the entire Strategy ecosystem essentially forcibly binds the hard currency attributes of Bitcoin to MSTR stocks. So why did Strategy violate one of the most sacred principles of its value proposition—never sell Bitcoin, and suddenly change its tune at the risk of overdrafting the trust of fanatical investors? The practical reason is that Strategy must continue to outperform market expectations, and even outperform the expectations of its own investors, in order to continue to absorb larger capital needs and maintain its own expansion growth rate.

His approach is to rely on the rising momentum of his own stock and the popularity of market speculation. On the one hand, he issues additional shares to the market to raise funds and then increases his holdings of Bitcoin (sometimes also allocating US dollar assets). On the other hand, he continuously issues new bonds and debt-like products to inject blood.

The tool it relies on most recently is undoubtedly STRC. This perpetual preferred interest is at the bottom of the company's debt structure, has no direct claim on any Bitcoin, can be redeemed by the company at any time, and the distribution interest rate may change every month. So far, STRC has attracted a huge amount of funds into the Bitcoin layout.

There is no need to go into details about the complex operation of various types of debt and equity products. You only need to clarify three core facts:

• All of its Strategy investment products do not directly hold Bitcoin and have no confirmed rights and interests in Bitcoin;

• The income performance of this type of product is not directly linked to the Bitcoin market, and is only determined by the supply and demand relationship of the product itself;

• The underlying logic of various products is contradictory: while claiming to hoard Bitcoin efficiently, they must continue to repay US dollar debt.

This mode of operation is, at best, an unprecedented high-wire act of ever-increasing complexity. In order to stabilize the situation and increase MSTR's credit valuation in the eyes of institutional investors, Saylor had to make it clear that he could sell Bitcoin and at least verbally promise to reduce his holdings if necessary. These institutional investors don't care about Bitcoin itself, nor do they agree with its value concept. They only care about whether they can safely get back their US dollar principal in the future, and this is Saylor's core target customer group for large-scale development.

AI marketing advertisements can be seen everywhere on the Internet, exaggerating that ordinary people can retire safely and enjoy life by buying STRC and receiving an 11.5% yield. But the reality is completely opposite. This product collects almost all investment risks:

1. Risk of core character dependence;

2. There is no guarantee of principal return;

3. Secondary market liquidity and price fluctuation risks;

4. The dividend interest rate is floating and not fixed;

5. The cash flow of the company's original software business continues to shrink, and it is simply unable to support the increasingly heavy debt principal and interest;

6. The product is at the bottom of the capital hierarchy and has a very low priority for repayment;

7. When the market falls, it is easy to trigger the risk of negative chain stampede;

8. Interest rate risks arising from fluctuations in the overall interest rate environment.

Similar risk points can continue to be listed.

To put it bluntly, this product is not a stable retirement financial management tool at all. This is understandable, but the problem is: Saylor and his followers deliberately package it as a safe asset comparable to a vault level, and also advertise that it can steadily outperform junk bonds and obtain ultra-high returns.

Just like the three-body problem, there are endless second- and third-order chain impacts between various related products of Strategy and investors in the public market, and the logic is so complex that it is difficult to deduce. Even with Saylor's extraordinary IQ, he simply couldn't predict all subsequent trends.

At present, this model may be able to survive for a while.

But a group of smart professional investors on Wall Street are already thinking about how to dismantle this business model: shorting company stocks and shorting Bitcoin to make huge profits. The core of this game ultimately lies in undermining the market’s trust in Saylor and Strategy itself. Such products may not necessarily collapse due to underlying technical issues, but they can easily fail completely due to a collapse in market confidence. The repeated swings in the core principles of the product and the frequent reversal of positions are consuming the trust of investors every day.

Concentrated selling by investors will trigger STRC and even drag down the Bitcoin market. With so many variables involved and various constraints imposed by the public market, Saylor and Strategy simply cannot predict all risk combinations. More importantly: Saylor’s interests are completely inconsistent with those of ordinary investors. His personal wealth, MSTR shareholding, ego, and industry status may all drive him to make decisions that harm the interests of ordinary investors.

The original intention of Bitcoin was to combat the random decisions of self-interested financial policymakers and the resulting Cantillon effect. However, Strategy replicates the profit-seeking chaos of the traditional legal currency system within the Bitcoin ecosystem.

In the long run, Bitcoin itself will not be fundamentally impacted. However, countless loyal investors who blindly follow Strategy are likely to suffer heavy losses in the end. It is not until they have invested all their investment that they finally wake up and quit this blind obedience. Regardless of the outcome, Michael Saylor, as the core leader, will still remain firmly among the billionaires.