Bitcoin treasury companies offer fiat arbitrage
The guest argued that select Bitcoin treasury companies are well-positioned to create Bitcoin through fiat arbitrage, presenting attractive entry points during steep market drawdowns.
The argument
The guest highlighted that his fund selectively accumulates specific Bitcoin treasury companies, such as MicroStrategy and MetaPlanet, particularly when they trade near or below their net asset value (NAV) relative to their underlying Bitcoin holdings. He argued that these companies can execute a strategy of leveraging fiat capital to acquire Bitcoin, though he remains cautious about near-term volatility.
The thesis, stress-tested
✓ What validates it
- ✓Bitcoin treasury companies maintaining or expanding their premium to NAV
- ✓Successful execution of fiat-to-Bitcoin accumulation strategies by the named companies
▸ Risks discussed
- ▸High downside volatility in Bitcoin and related treasury equities
- ▸High cost of options insurance on Bitcoin ETFs like IBIT
- ▸Complexity and theta decay when managing protective put spreads
Hear it yourself
"The good news is that as tumultuous as it's been, especially for the Bitcoin treasury companies, is that because we're a hedge fund and we operate in the capital markets, we are able to buy these in the private market and get them at close to or under 1M NAV to the underlying Bitcoin of the company."
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