It's a bet that makes little sense unless you can't invest directly in the asset in question but still want to speculate on a significant increase in its market value in the short term.
This is probably what these investors—or speculators?—are doing as they continue to acquire shares in Strategy, formerly MicroStrategy, the group founded and led by Michael Saylor.
The man himself wrote on his X thread the day before yesterday that Strategy's considerable valuation premium over the value of the bitcoins held by the group was due, in his words, to "credit amplification, the advantage of options, index fund flows, and superior access to institutional investors." Nothing less.
Famous short seller Jim Chanos responded with a vitriolic reply that delighted commentators. Although we are fundamentally on the same side of the fence as Mr. Chanos, we have to admit that Michael Saylor is not entirely wrong here.
Indeed, apart from Strategy, which pulled off a legendary sleight of hand on this one, it is hard to see who else could have borrowed at such a ridiculously low rate to finance bitcoin acquisitions. Moreover, institutional investors' appetite for Strategy's capital remains undiminished.
Although Vanguard is looking to sell, it still holds 7% of the shares. Behind it, Morgan Stanley, Amundi, JP Morgan, BlackRock, and State Street, among others, have all been buyers in recent weeks—on behalf of their clients, of course.
Michael Saylor, for his part, is not losing sight of his goal. The great evangelist of Bitcoin still presides over a stock option compensation system with an issue price of $42—a juicy capital gain that can be realized immediately by its lucky beneficiaries.
Unsurprisingly, the latter are quick to immediately offload the shares they receive so generously. This does not prevent Saylor from inviting his audience, in all seriousness, to "stand with him on the barricades."
