00:00 Speaker A

Public companies are increasing their Bitcoin exposure and now hold more than 3% of all Bitcoins in circulation. That’s according to analysis from Bernstein Research. They say imitation is this is flattering and if this trend comes on the heels of the business software company strategies crypto buying, of course, to explain more about who’s buying crypto and why, senior reporter David Hollworth is joining us now. So everybody’s trying to follow the Michael Saylor playbook now.

00:33 David Hollworth

Yeah, exactly. I mean, uh, why wouldn’t you seeing the rise in Bitcoin at this point? And you know, it’s an interesting dynamic. There’s a premium premium between Bitcoins or excuse me, strategies, uh, market cap and the amount of Bitcoins it holds. And other companies that have done this, even this year, have also seen that, but not all of them have. So in some sense, the investors that are putting money into this or the companies themselves are kind of, uh, it’s seemingly magically creating money. So that’s obviously a interesting dynamic from just an overall markets perspective. And you know, we’re paying a lot of attention to the companies and we’ve seen a little bit of investor limits to this trend last week. GameStop and uh, the president’s namesake media company both uh, reported doing these kind of strategies and uh, or at least plans to and their stocks dropped on the day. So it’s kind of an interesting trend to pay attention to.

02:11 Speaker A

Right. And we’ve seen strategies sometimes on individual days drop when it says it’s sort of raising capital if investors view that as dilutive whatever they’re doing. But you mentioned that premium, which is the thing that I guess other companies that are doing this are chasing, right? They want to get that to trade even better than Bitcoin has. What have you gotten in terms of explanations of why strategy trades at that premium to Bitcoin?

02:57 David Hollworth

Yeah, that’s a good question. Um, I think it has to do with the fact that they take on a fair amount of leverage by um, issuing debt. And then on top of that, it’s some sort of forward indication about the price of Bitcoin and how well uh, strategy and Michael Saylor are going to continue to accumulate in the future. That’s the best explanation I have. But if you look at a financial or an economics textbook, you’re not going to get a clear answer like that, so.

03:42 Speaker A

No, nor are you for Bitcoin in general, I suppose.