When Bitcoin is the business model, investors must be careful

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Is it logical to the company to carry a large pile of money in its public budget? In theory, no – it is better to return money to shareholders and allow them to decide what to do with it. In fact, companies like Apple and Berkshire Hathaway have become huge pork banks, and investors seem to be well with them.

Some companies take this anomalies and run with them – by keeping Bitcoin instead of dollars. Presidential Family Business group, Trump Media and Technology Rapid $ 2.5 billion For this purpose. It joins the Liberal Broadcasting platform Rumble, Meme Stock, the Gamestop and Tesla. the GrandDDDy of Crypto Crensuries It is the strategy – previously known as Microstrategy – which has $ 64 billion from Bitcoin.

There are three possible reasons that the company may provide for a digital origin contract like Bitcoin. One is simply to earn if the price rises. This, regardless of being unknown, can be easily rejected. Investors can invest in the symbol themselves, directly or despite the circulating investment funds.

The better reason may be that the company thinks it can do something with Bitcoin the investors cannot. In the case of strategy, this thing is the shrewd financial engineering that involves the issuance of convertible bonds and favorite stocks on favorable terms, and collecting money to buy more symbols.

Seek, who is the conservative asset manager who is consistent with him, is about to integrate through a process of integration with a listed company called Asset Entities, and hopes to add their distortion to this business model, buy companies with cash piles that are less than their value and convert them to Bitcoin. She said on Tuesday that she had planned to raise up to $ 1.5 billion and will publish it in “Alpha generation”, or market strategies.

In some cases, companies claim that Bitcoin is a logical supplement to their other companies. Investors should believe in profit from these inaccurate opportunities when they see it. Rumble wants to provide encryption portfolios. Trump claims that it will generate “a synergy for subscription payments, a interest symbol and other planned transactions.”

The third argument is that bitcoin is the future, so it is not a fool. Strive CEO, Matt Cole, is frankly arguing that Bitcoin should be the basis for which assets and other investments are measured, and that the pursuit is Berkshire Hathaway. Trump believes that Bitcoin is a “financial freedom summit” tool that will be released from harassment by the prevailing financial institutions.

For a person who believes in bitcoin sovereignty, all this is completely logical. Companies that benefit to buy digital symbols will gain enlarged returns, sailing with joy towards the point where Bitcoin replaces the dollar as the global Lingua Franca. Back to stocks are, in this world, an old hat; Bitcoin per share is the scale for a chase.

Most shareholders in listed companies may still prefer real assets with expected cash returns. They should see the direction of the Bitcoin as what it is: a risky pont, and an attempt to ride the tails of the coat from the strategy, which trades about 1.6 times the value of encryption possessions. Then again, the beauty of the market is that there is a cover for each bowl.

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