Veteran Investor Ross Gerber Criticizes Strategy Inc.'s Approach to Buying Bitcoin.

Veteran investor Ross Gerber criticizes companies like Strategy Inc. for issuing stock to buy Bitcoin, calling it "crazy bad math" for investors. He warns that this approach could "nuke" the cryptocurrency if things go wrong. Gerber also questions the use of debt to fund purchases and suggests owning Bitcoin directly or through an ETF is a better option. Strategy's stock has underperformed Bitcoin despite adding 430 BTC to its treasury.

Title: Strategy Inc.'s Bitcoin Acquisition Strategy Criticized by Ross Gerber

Veteran investor Ross Gerber has recently criticized companies like Strategy Inc. for issuing stock to buy Bitcoin, labeling it "crazy bad math" for investors. Gerber warns that this approach could "nuke" the cryptocurrency if things go wrong. He also questions the use of debt to fund purchases and suggests owning Bitcoin directly or through an ETF as better options. Despite adding 430 BTC to its treasury, Strategy Inc.'s stock has underperformed Bitcoin.

Strategy Inc. has been actively accumulating Bitcoin, with its latest acquisition increasing its holdings to 629,376 BTC, valued at approximately $46.15 billion [1]. The firm's MSTR stock has seen a decline but remains up 22% year-to-date. The company has updated its MSTR Equity ATM Guidance to optimize its Bitcoin acquisition strategy, planning to issue equity when the stock trades above 4.0x market NAV and shifting to debt obligations when it trades below 2.5x [1].

Ross Gerber, however, argues that issuing stock to buy Bitcoin is a flawed strategy. He believes that companies should consider owning Bitcoin directly or through ETFs, which he finds to be more investor-friendly and less risky. Gerber also questions the use of debt to fund Bitcoin purchases, stating that it could lead to financial instability if the market turns against the asset.

The latest acquisition followed a 5% drop in Bitcoin's price, demonstrating Strategy Inc.'s commitment to Bitcoin despite market volatility. However, the firm's stock has not reflected this commitment, underperforming Bitcoin despite the significant increase in its Bitcoin holdings.

As of August 18, Strategy Inc. holds 629,376 BTC, which represents approximately 3% of the total Bitcoin supply [2]. The company's goal is to own up to 7% of the world's Bitcoin, but it has dismissed concerns about market dominance.

In conclusion, while Strategy Inc.'s Bitcoin acquisition strategy has been successful in increasing its holdings, the criticism from Ross Gerber highlights the potential risks and complexities involved in issuing stock and using debt to fund cryptocurrency purchases. Investors should carefully consider the implications of these strategies and weigh the potential benefits and drawbacks before making investment decisions.

References:
[1] https://en.coinotag.com/strategy-acquires-430-btc-amid-market-volatility-holding-629376-btc-worth-46-15-billion/
[2] https://zycrypto.com/strategy-stuns-with-new-51-4-million-bitcoin-purchase-now-owns-3-of-all-btc/