off topic : update / crypto accumulators (crashing) / Bloomberg piece .............................
bloomberg.com
or :
archive.md
title : From 2,600% Gain to 86% Wipeout, Crypto’s Hottest Trade Crumpled
excerpts :
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What began the year as one of the best trades in the stock market has, in a matter of months, turned into one of the worst.
An array of public companies thought they had found a sort of perpetual motion machine: Use your corporate cash to buy up Bitcoin or other digital tokens and presto, your share price shot up even more than the value of the tokens you bought.
It was a playbook invented by Michael Saylor, who transformed his company, Strategy Inc., into a publicly traded Bitcoin holding vehicle.
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But it was always hard to explain why tokens should be worth more just because they were held by a public company, and the wheels began to come off the car, at first slowly and then much more quickly.
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Strategy came up with a remarkable array of convertible bonds and preferred shares that funded the company’s Bitcoin purchases, with the tokens growing to be worth over $70 billion at one point. DATs as a group raised over $45 billion this year to purchase crypto tokens, according to Shabalin at B. Riley.
Now, though, Strategy and all the other companies are on the hook to make the interest and dividend payments on that debt. That is a problem because their crypto holdings, for the most part, don’t generate any cash flow.
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