Mike Novogratz Breaks His Silence On Bitcoin & MicroStrategy - This Will Test Every Investor!

The bad news about this is I would say that the major reason Bitcoin rallied so impressively was that Michael Saylor was back in the saddle and he was selling Microsoft shares to buy Bitcoin. He was also selling his perpetual preferred STRC 11 and a quarter percent. He was selling a lot of it. And so, what's that doing? That's leveraging up MicroStrategy. And he's willing to do that at 11% a year because he thinks Bitcoin's going to grow more than 11% a year. And people trust that he's not going bankrupt. You know, he set a lot of dollar reserves to pay for his dollar coupons that he has. And so, he's got this machine going, this fixed-income machine plus the equity machine and that was buying most of the Bitcoin, which was driving other people into the market. When that stops because market starts coming down for other reasons and he's not as aggressive, the natural buyer of Bitcoin, i.e. him. And again, it's not Michael Saylor himself buying the Bitcoin. It is there's a giant retail base in America that is taking their crypto exposure through MicroStrategy. And retail was buying. And all of a sudden the last two days people got scared. And you know, all of a sudden you had a nice run for the profit taking comes out. This will be a really interesting area if we can hold this grind back up. I think that it'll go to 80, but it's going to be correlated a little bit with the rest of the market. So if you think about it, gold got destroyed today, silver got destroyed today. Today was a day where people who had positions had to get out of them. Dollar yen sold off, euro rallied. It was get out of what you were in. The risk managers at the big pod shops had their big stick and they were smacking people on the hands. If you know Michael, you know his fundamental belief Bitcoin's going higher. Listen, if something would happen and Bitcoin doesn't go higher and it goes down to 30,000 or 20,000, yeah, MicroStrategy is not going to be a very good stock to own. Part of the bet that shareholders in MicroStrategy have made is that Bitcoin goes higher. You're now basically trading at parity to the Bitcoin that it has, you know, when you adjust for debt and everything else. And so now it feels more like an ETF. Listen, there were tons of people, me included originally, when he had this strategy that was trading at a big premium, said it can't last and it's got to go to become just equivalent to an ETF unless he can do something really creative. His creativity, which was real creativity, was he found a way for people to believe in him, sell Bitcoin at a premium, use that to buy more Bitcoin. For the existing shareholders, they benefited. For the new shareholders, they needed new people to come in. I think he will have a hard time reigniting that flywheel. But I think MicroStrategy can trade as a closed-end fund, you know, for a long, long time without having to sell any Bitcoin. It might trade at a 10% discount or even a small premium. And so all these treasury companies are now in the same position. MicroStrategy at least has a ton of volume every day. Like it'll trade $2 billion of volume today. Like to put that in perspective, Galaxy, which is a $10 billion, $9 billion company, will trade $250 million today. So they're trading at more volume than the ETFs. Most of the other DATs, other than Tom Lee's BNM, are trade with almost no volume. Why it's important for crypto is because for 3 months, that was the vehicle that was bringing new capital into our space. It doesn't have to be a disaster for the space. It's just going to be dead money. And so, for crypto to have its next leg up, you need new sources of capital. And that's either going to be wealth or it's going to be some retail frenzy that shows up again out of Asia or out of somewhere. It's easy to sell things that are going higher. I mean, it's hard to sell things that are going lower. We might go lower first. We might go, you know, I would say volumes are down 30 to 35%. Remember, crypto investors like a lot of leverage, and a lot of them got wiped out. And so you wiped out a lot of market makers and a lot of participants. And I always say Humpty Dumpty cracks, it takes more than a week to put them back together again.

It gets put back together again because paychecks come in, dad gives you money, inheritances, and people have more money to start putting in the markets. But it just takes time. Bitcoin reclaims 85,000 before the end of June. That would be wildly bullish.