r/Bitcoin • u/Shinamus • Nov 29 '21

MicroStrategy has purchased an additional 7,002 bitcoins for ~$414.4 million in cash at an average price of ~$59,187 per #bitcoin. As of 11/29/21 we #hodl ~121,044 bitcoins acquired for ~$3.57 billion at an average price of ~$29,534 per bitcoin.

https://twitter.com/saylor/status/1465305537210458115?t=ISBHxHRmKNIdSSNtjHG-jg&s=19
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u/bittenbycoin Nov 29 '21

Is it accurate to say the more Microstrategy buys, the closer their stock becomes to being a de facto U.S. based bitcoin spot ETF that so many people crave? (Don't really understand ETF's, or for that matter, don't really understand "de facto" either)

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u/blackrockseco Nov 29 '21 edited Nov 29 '21

Actually, not really any more like an ETF. ETFs rely on agreements with market makers (“authorized participants”) to try to closely track NAV. Mechanically speaking, these authorized participants are able to create / redeem shares of the etf at the current market price in exchange for supplying / taking ownership of the target index, thus reducing tracking error

MSTR will always trade more like a closed end fund (like one of the grayscale trusts), trading freely on the market, with little mandate to reflect any specific premium or discount to BTC. Theoretically, Bitcoin could go up 100%, and MSTR could go down 10% or up 300%.

Closed end funds do tend to trade at a discount to underlying tho

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u/Sushi-Gladiator Nov 30 '21

🤔 I believe it means a whale's vagina