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I’ve noticed that many people are worried about Strategy’s statement that it will sell Bitcoin when xNAV < 1, fearing it could trigger a negative spiral.
But in my view, selling Bitcoin to prop up the stock price when xNAV < 1 is both inevitable and necessary. As the leader in DAT, Strategy must make it clear to everyone that its stock price is backed by the value of Bitcoin. This is essential for fulfilling its narrative: “when it drops, it trades at a 10% discount to Bitcoin, but when it rises, it trades at a 2x premium.”
Some garbage DATs have stock prices that are less than 80% of their held coin value. Would you dare to buy DAT stocks managed like that?