The end of paper bitcoin paper

Bitcoin Magazine

The end of paper bitcoin paper

As summer turns to fall into the northern hemisphere, Bitcoinize the dream of Bitcoinize finance is quickly becoming a nightmare. Bitcoin Paper’s summer of issuing shares for disoriented financial markets in overvaluations (extreme) to buy Bitcoin to Cheap is finishing, not with a success of success but with a very impressive groan.

Bitcoin’s treasure dream was pleasant; Even openly admit that he did some sense.

For a few months, Wall Street happily entertained the foam and fed the fires. But finally, financial gravity is being reaffirmed: we are all awakening from our summer adventure with financial deception, where things negotiated by further of what they are worth objectively. It is wonderful and tragic to see standard corporate finances once again stand firm.

Earlier this year, our David Bailey, CEO of BTC INC, the owner of Bitcoin magazine, told Bitcoin to the corporations, another BTC INC arm, that “if you can sell a dollar for more than one dollar, you make that exchange throughout the day.”

It turns out that this free lunch strategy (!) It was not free … eliminating money from investors in the process has been a painful trip in learning that lesson.

When you – The head of the retail bag – is buying security instead of real Bitcoin, is usually doing it with a premium (for example, a Mnav above 1). Sightly, this is verifiably crazy: why buy a dollar for more than one dollar …? – and The same force that encourages these Bitcoin Treasury companies.

Those of us looking at this with a justifiable criticism presume that the MNAV would be reduced to approximately 1 through actions that fall or remain stable while the Fiat Price of Bitcoin increased. Fate played a trick for us colliding Bitcoin’s price instead. Consequently, many of these airy monstrosities and financial alchemy fell for much greater multiples.

Bailey’s own Naka, for which Bitcoin magazine offers certain marketing services, has been the funniest (and for many people around these parts, financially tragic). When Naka announced an important shares issuance program of $ 5 billion last month, shares collapsed Downward, around 30% in the news, and continued to fall from then on, 70% tidy of its initial bomb around the announcement of the reverse fusion with friendly; $ Naka has fallen into a whopping 85% since its highest point in May, recently establishing a new minimum of $ 3.28.

Market prices are the truth, and the truth here at dusk for the dream illusion of treasury companies is that filling corporate balances with retail capital and debt to acquire bitcoin was not a way that the land promised.

“The market price tells you if you are right or is wrong,” said Moshe Shen, managing director of Apac Wintermute Trading, on the 1st of the recently completed Bitcoin Asia in Hong Kong. I guess that tells us enough about the doubtful perspectives of Nakamoto and other Bitcoin Treasury companies.

Bitcoin’s treasure magic ended

The recurring pump effect and fall of issuing more actions for a Bitcoin Treasury strategy no longer comes with a large bomb at the price of shares; Hunting, as they would suggest sanity and traditional corporate finances. No matter how many thousands of coins are eating Saylor’s strategy, the Mstr price guard falling, having returned the total sum of zero percentage of common shareholders since November last year; Metaplenet, after recently spent 20,000 coins in Hyped-Upii celebrations, has seen its stock fall to levels not seen before the Bitcoin paper summer began.

In a recent article that narrates the treasure phenomenon, Nikou Asgari of the Financial Times He said southly that “the cryptography purchase strategy depends largely on issuing shares or increasing debt to buy bitcoin and other tokens, hoping that this feed the growth of the price of shares.” Understanding the point, it continues, “however, to increase capital becomes more difficult to make as the valuations of the company fall.”

When the price of the shares falls, and the MNAV is compressed to 1, the magic of free money disappears. We will discover if the hundreds of treasure companies have (any?) Viability once the era of the impression of magical money ends.

Even Tyler Evans of Utxo Management, another company of BTC INC and Nakamoto, confessed so much to Asgari in that same FOOT Article: The market “was irrationally overheated”, and that the Bitcoin Summer document “was the peak for both exaggeration and for the number of companies that are launched.”

At the end of Bitcoin Summer’s role, we see that reality reaffirms itself, dramatically recovering from the collective deception that market prices in the most liquid markets in the world could deviate so far from the MNAV course.

Here is a bold prediction: In a year, Bitcoin Treasury companies will not be a thing. The majority of the lower level will not survive, and instead they will spit the coins that are engulfed so glutton and recklessly. Those who have a serious pit and competent management teams, such as the strategy or the Metaplanet, will survive, but see their Mnav shrink to a splinter above zero, where they belong logically.

Bitcoin Summer’s summer is over, and for my part, I couldn’t be more excited to see that these nightmares return to the ethereal sleep lands where they came.

This publication, the end of the role, Bitcoin Summer appeared for the first time in Bitcoin magazine and is written by Joakim Book.