allure – Earlybirds Invest https://earlybirdsinvest.com Latest Crypto News Tue, 10 Jun 2025 11:31:41 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.9 https://i0.wp.com/earlybirdsinvest.com/wp-content/uploads/2024/12/cropped-New-Project-2024-12-17T235703.455.png?fit=32%2C32&ssl=1 allure – Earlybirds Invest https://earlybirdsinvest.com 32 32 240146708 Strategy Shifts Capital Raise to Preferred Stocks as Common Share Issuance Loses Allure https://earlybirdsinvest.com/strategy-shifts-capital-raise-to-preferred-stocks-as-common-share-issuance-loses-allure/ https://earlybirdsinvest.com/strategy-shifts-capital-raise-to-preferred-stocks-as-common-share-issuance-loses-allure/#respond Tue, 10 Jun 2025 11:31:40 +0000 https://earlybirdsinvest.com/strategy-shifts-capital-raise-to-preferred-stocks-as-common-share-issuance-loses-allure/

Disclaimer: The analyst who wrote this piece owns shares of Strategy (MSTR).

Over the past two weeks, Strategy (MSTR) has refrained from utilizing the at-the-market (ATM) equity program on its common shares to fund bitcoin

purchases, choosing instead to use the programs on its two perpetual preferred stocks.

The choice most likely reflects the narrowing premium between the company’s share price and its multiple net asset value (mNAV) or, more colloquially, the difference between its market cap and the value of its bitcoin holdings, and allows Strategy to raise funds to buy more BTC without diluting shareholders’ stakes in the company.

When the share price trades close to the underlying bitcoin asset value, issuing common shares via ATM becomes less attractive. Such offerings are typically only advantageous when executed at a meaningful premium.

Strategy funded its most recent 1,045 BTC purchase using proceeds from its two perpetual preferred stock ATMs: 59.18% from the STRK offering and 40.82% from the STRF one. These preferred stocks have demonstrated strong lifetime returns of 35% for STRK and 24% for STRF. This gives the company greater flexibility to continue accumulating bitcoin while preserving upside for common stock investors.

There’s also an additional dynamic at play, according to analyst Jeff Walton. The effective dividend yields of STRK and STRF have steadily declined from about 10% even though the yield on the benchmark U.S. 10-year Treasury has remained relatively constant at 4.5%. That’s because the dividend yield falls as the price of the stock increases, a bond-like behavior that makes the preferred shares more attractive in a stable rate environment.

Strategy is likely to reengage the ATM on its common stock if the share price rises significantly, particularly if it exceeds twice the mNAV, which would allow room for dilutive issuance at a premium. While the common stock ATM remains the primary mechanism to fund dividend obligations on the preferred shares, Strategy retains the option to use the preferred stock ATMs for this purpose as well, depending on market conditions.

]]> https://earlybirdsinvest.com/strategy-shifts-capital-raise-to-preferred-stocks-as-common-share-issuance-loses-allure/feed/ 0 41218 Global trade tensions are boosting Bitcoin’s strategic allure – VanEck https://earlybirdsinvest.com/global-trade-tensions-are-boosting-bitcoins-strategic-allure-vaneck/ https://earlybirdsinvest.com/global-trade-tensions-are-boosting-bitcoins-strategic-allure-vaneck/#respond Sat, 05 Apr 2025 03:40:40 +0000 https://earlybirdsinvest.com/global-trade-tensions-are-boosting-bitcoins-strategic-allure-vaneck/

US President Donald Trump’s new reciprocal tariffs on 180 countries have reignited global trade tensions, which has led to fresh interest in Bitcoin (BTC) as a strategic financial asset, according to VanEck’s head of digital assets, Matthew Sigel.

Following the April 2 announcement, Bitcoin dipped to the $81,000 range amid broader risk-off sentiment. However, the flagship crypto stabilized and outperformed equities in the days that followed.

Sigel attributed the resilience to Bitcoin’s growing appeal as a neutral asset in times of economic uncertainty. He wrote in an April 4 client note:

“While slower growth alone isn’t bullish for Bitcoin, the potential policy response is: if tariffs drag on GDP without sparking a new inflation wave, the Fed may have scope to cut rates.”

He added that this would reintroduce the liquidity conditions under which “Bitcoin has historically excelled.” He also pointed to the growing appeal of neutral financial infrastructure as traditional systems become increasingly politicized or “weaponized.”

Nations adopting Bitcoin

Sigel pointed to recent developments that demonstrate how Bitcoin’s role in global trade continues to evolve, with several nations turning to digital assets for cross-border settlement.

Intelligence reports revealed that China and Russia have begun settling select energy transactions in Bitcoin and other digital assets, marking a significant departure from traditional dollar-based systems.

Bolivia, facing constraints on foreign reserves and payment networks, announced in March a plan to import energy using digital assets as payment rails.

In Europe, French state-backed utility EDF is exploring Bitcoin mining as a use case for excess electricity it currently exports to Germany at a loss. EDF reportedly views domestic mining as a way to monetize surplus supply in a volatile energy pricing environment.

According to Sigel:

“These aren’t theoretical use cases anymore. We’re seeing monetary realignment in real-time.”

He argued that the tariffs may act as a catalyst for this transition by forcing nations to reassess their reliance on US-dominated financial systems.

He wrote:

“In that context, the latest tariffs aren’t just an economic story, they may be an accelerant for Bitcoin’s role in the emerging multipolar order.”

Fed, Dollar Index, and ETF flows

Sigel advised investors to track Federal Reserve policy closely, as dovish shifts in rate expectations and rising liquidity historically boost Bitcoin.

He also pointed to the US Dollar Index (DXY) as a critical indicator, suggesting that any dollar weakness could reinforce Bitcoin’s status as a hedge.

Despite recent market volatility, US-listed spot Bitcoin ETFs remain net positive by approximately $600 million this year, supported by inflows in late March.

Sigel noted that continued demand for ETF products and on-chain activity reflects growing institutional interest.

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