For a long time, the US stock market would pay $2 for $1 worth of crypto. If you had a stash of, say, $500 million worth of Bitcoin, you could plop it into a random public company and the market would value the company at $1 billion. Then you could raise more money in at-the-market stock offerings, and use the money to buy more Bitcoin. Each $1 that you spent on Bitcoin would increase your market capitalization by $2, allowing you to raise more money to buy more Bitcoin, etc., in a virtuous cycle that, come on, just had to end badly. If nothing else, this strategy was extremely visible and extremely easy to copy, so everyone did it, driving the premium down.

But, for a while, good trade. One oddity of the trade was that, if you did have $500 million worth of Bitcoin, and someone came to you and said “I’ll give you $500 million for your $500 million worth of Bitcoin,” you’d be kind of an idiot to sell. Those Bitcoins were going for $1 billion on the stock market! If you had a big stash of Bitcoin, the proper trade was to start a Bitcoin treasury company, not sell the Bitcoins to someone else who already had a Bitcoin treasury company. I wrote about this problem in July: