A new article of mine published in Bitcoin magazine - the return of the Tontine! Could be a very interesting development in the pensions space and a logical option for bitcoiners in retirement also.

Bitcoin Magazine

The Return Of The Tontine - A Natural Retirement Option For Bitcoiners?

What are Tontines, and how could bitcoin backed Tontines provide an answer to the question of retirement in an increasingly unstable world?

#tontines #pensions

Thoughts on SWC Bitcoin based convertible debt as announced this week in the UK.. This is a loan of $21m worth of Bitcoin, so let’s say around 180 btc and increases their stack around 8-9%. It’s at zero interest in Bitcoin terms. The conversion sits at 5% above the equity price from the lenders point of view, and can be triggered once 50% above from the companies point of view and only after 6 months for this latter option. Basically, the binary way to look at it is as to whether it converts or not - if it does, the company gets an extra atm at around 200p. If not, the loan just gets paid back with minimal loss in Bitcoin terms. Why would the lender convert? If the shares have performed better than btc. Why would the company convert? As long as the effective purchase of bitcoin at the conversion price is accretive to shareholders. Strikes me there are some edge cases where the lender could lose in btc terms but they are marginal - eg equity goes up 55%, but btc goes up by even more - lender ends up with the shares and not the btc? Be interesting to see if there are further of these and on slightly better terms for the company - ie ends up being a more accretive atm if converted. #swc #btc

The audacity of $STRC / Stretch, allowing the market to set the interest rate🤯 Somewhere up in the clouds Mises, Hayek and Rothbard have read the prospectus… and they’re smiling. @Saifedean Ammous

295 billion teeth 🦷 in the world (approx) Only 21 million Bitcoin. Gotta love the FT🙄 cc @Joe Nakamoto

Lots of fairly inane chat about #msty at the moment. Just bear in mind what the underlying is, and that in general terms, at varying times in the market buyers of calls can profit, sometimes sellers of calls, but unlikely both at the same time. My conclusion is that MSTY holders are likely to end up underperforming #MSTR, and are likely thinking in $ fiat terms. Just like a trader who buys Bitcoin at 10k, sells at 20k, buys at 30k, sells at 50k, buys at 60k sells at 80k, and probably thinks they are some sort of genius.

#bitcoin

As #MSTR announced the first #$STRK preference share at the market offering today, some thoughts on how this might play out in the coming months. Firstly, $11m is extremely small as a way to start. It would take around 1,900 weeks at this level to exhaust the $21bn! But what I suspect will happen is they will continuously ramp this up in the wake of bitcoin price appreciation in the months to come. Let's consider how they might do this. The current price of STRK is $88.45, so MSTR are offering about a 9% yield in selling into the market at current levels. That price is made up of two components, essentially, the value of the perpetual fixed dividend payment of $8, and the value of potential future conversion to equity at 1/10th of the number of STRK shares held. Bear in mind if bitcoin price rises, the value of that potential conversion to equity will also rise (eventually, if MSTR traded well above $1,000, STRK might end up trading more like MSTR stock since the $8 dividend would prove so small by comparison). Just like when selling MSTR shares into the market, there is no free lunch - by selling more STRK ATM, it will depress the STRK price, and all else equal require them to pay a higher yield to the market the more they sell. Selling at $100 is clearly better for MSTR than selling at $88. What they could do though, is decide that at any level of STRK price above X, say, they will relentlessly issue the ATM in to the market. Let's say this price is $100 (which leads to the originally 8% dividend). As the MSTR share price rises, the increasing value of the equity conversion, and perhaps the increasing security coverage on the dividend payments may help them to sell more and more STRK into the market at this level. @PunterJeff @Ben Werkman

For all the #MSTR 1x MNav people out there. I’m confused.. you want to value MSTR solely based on the bitcoin they hold, but that in itself has gone from 252,220 to 499,096 since the US election in November. So which figure do you want to use again?!