VanEck Clarifies MSTRs Bitcoin Strategy as Convexity Bet Trump Media Group Plans $2.5 Billion Bitcoin Purchase Pakistan to Mine 17,000 Bitcoin Annually Using Coal Power Sam Altman's World Project Aims to Verify Humanity for AI Defense

This week, several notable developments in the financial world have captured attention. VanEck, a prominent investment management firm, has provided a comprehensive explanation of the investment strategies for bitcoin treasury companies, focusing on the main vehicle, MSTR. VanEck clarifies that MSTR is not merely a leveraged bet on bitcoin but rather a "convexity" bet, where investors are exposed to an increasing bitcoin position as the price of bitcoin rises. This unique investment structure means that MSTR's value is driven by the circular relationship between its premium and its ability to finance more bitcoin purchases. Michael Saylor, the CEO of MicroStrategy, acknowledges the centrality of this premium but believes that the company's "crypto reactor" can sustain this model for an extended period. However, the valuation of such a model remains challenging due to its circular logic, making it a risky investment for those who prioritize valuation models.

In another significant development, President Trump's exchange-listed media group announced plans to raise $2.5 billion from investors to buy bitcoin. This move has raised questions about the potential impact of Trump's policies on the value of his bitcoin holdings. The president is expected to end up with roughly a 25% stake in the $2.5 billion worth of bitcoin, creating a situation where his personal financial interests could be influenced by his policies toward the dollar and bitcoin. This raises concerns about potential conflicts of interest and the incentives that could drive his economic decisions.

Meanwhile, DeFi Development Corp, a Solana treasury company, has been highlighted for its unique approach to solving the problem of investors not being able to accumulate SOL fast enough. The company offers to invest proceeds from stock sales above NAV into SOL on behalf of investors. However, the success of this model depends on the willingness of subsequent investors to pay above NAV, illustrating the circular conundrum of crypto treasury companies. The investment logic requires finding a "Goldilocks" multiple of NAV that is neither too high nor too low, a challenge that makes the investment case seem more like a fairy tale than a reliable strategy.

Pakistan has also made headlines with its plan to mine as many as 17,000 bitcoin per year using surplus energy from underused coal-powered plants. While this initiative aims to utilize excess capacity, it raises concerns about the environmental impact of burning more coal. The country plans to keep the mined bitcoin in a strategic reserve, which could be seen as a way to hedge against budget deficits. However, this approach mirrors the strategy of MicroStrategy, which has rebranded its bitcoin holdings as a treasury company to potentially increase their value.

In other news, a recent dinner event billed as "Dinner With President Trump" turned out to be a brief affair, with the president speaking for only 15 to 20 minutes before departing. The event, which cost attendees about $1,200, was reportedly attended by individuals who had hedge positions, indicating a strategic approach to the investment. The president's short stay at the event suggests that he may have had other priorities, leaving attendees to enjoy their meals without further engagement.

Finally, Sam Altman's blockchain-based project, World, has been making waves with its ambitious goals. The project aims to verify the humanity of every person on Earth and become the world's largest financial network, through which a significant portion of the global economy will flow. The project uses irises as a unique identifier to prove humanity, with the goal of fortifying the internet against AI-driven deceptive content. While the project has signed up about 12 million users, the rapid pace of technological change means that success is crucial to prevent the internet from being overrun by AI. Altman's focus has shifted from avoiding a bot overrun to enabling AI agents to proliferate with human authorization, a move that aligns with the goals of his company, OpenAI. The World token, which is essential for the project's success, has been described as a way to incentivize sign-ups, attract investors, and motivate employees, with the CEO expressing excitement about the potential for financial gain.