MSTR net BTC position At Zero Profit
Negative Convexity Will Punish MSTR
Just a quick note. BITCOIN broke to $76k yesterday and this puts Strategy Inc’s Bitcoin position at a zero profit now.
Back in August 2025 we put this out on X and on our newsletter with the a statement that “all the bitcoin buyers better be in for the long haul now because if this level breaks (112k), we're going to test $80k,”
Well here is the current chart of Bitcoin and our downward trend channel has worked perfectly with the test at $97.5k fully rejected and you can see the current MSTR line in the sand for their DCA Breakeven price:
We do believe forced negative convexity selling out of MSTR will drive the new leg lower, alongside selling out of Tether as well. You see Tether creates synthetic dollars and acquires real world assets, including UST-Bills, Bitcoin and Gold. However if the price of these assets continue to tumble and if yields on T-Bills continue to move lower, well Tether will no longer be able to support their current market cap:
We will have more shortly in our subscriber only post, but we tried our best to warn everyone when BTC was being pushed to the limits by Wall Street games and putting in that $126k high, and now all the late buyers here will have to warehouse this and hope it goes back up.
Strategy Inc. will now suffer the fate of negative convexity as the rates on their variable debt move higher and the significance of their inability to raise more capital will lead to BTC sales, they will have no choice.
We will do our best to keep this term simple, “Negative convexity.”
As yields/BTC pressure rises further, the price decline accelerates beyond what a simple duration models can effectively predict:
Duration (think holding times) effectively “extends” because recovery relies on Bitcoin rebounding or more aggressive dividend hikes. (which we are seeing MSTR do)
If BTC keeps falling sharply, investor confidence in dividend sustainability wanes (despite their cash raise from equity sales and creating USD reserves covering 12–24+ months of payments) the forced selling and wider spreads will amplify the downside.
This results in asymmetric price behavior as the downside accelerates (negative convexity-like) when yields rise (STRC) and BTC declines.
In the bond world we usually refer to MBS in a more “classical” negative convexity (prepayment risk) or callable bonds (call risk). Here, it’s credit/asset-linked convexity risk, the variable rate does provide some floating-rate protection, but the embedded leverage to volatile Bitcoin introduces convexity that’s unfavorable in adverse scenarios (rising rates + falling BTC price).
In short: STRC aims for low-volatility, high-yield exposure to Strategy’s Bitcoin strategy via adjustable dividends. But in a rising-yield world (think Japanese bonds) that pressures Bitcoin downward, the product’s price can exhibit effective negative convexity, falling faster and more severely due to compounding credit perception and asset value declines, with limited upside capture if conditions reverse (due to potential rate cuts by MSTR).
We know this is a difficult concept, but conceptually, think about the acceleration of participants looking to just abandon ship and sell at any cost to preserve capital and you get an idea of how narrow the opening to sell really is. You see the same Billions in ETF buying that got us here, will also be the same billion in selling that moves BTC to a more volatile led downside. In the trading world, we call this price action as “TAKING THE STAIR CASE UP, BUT THE ELEVATOR DOWN!
Thank you guys, appreciate all the support and thank you for reading our work. Get on board you won’t regret it!
Have a great day!
-Team Magnelibra
Support directly to our BTC address if you can: 3DvDvPnjwu5Fd6sagAYmiFXA2fPkjJf2cp
Anyone interested in investing in Monero (XMR) please reach out, we have a link to Kraken below if you use our referral code or link to try it, we’ll both earn 75 USD when you trade $200 USD of crypto in the app! (PLEASE CHECK YOUR LOCAL RESTRICTIONS! NY RESIDENCE CANNOT BUY XMR ON KRAKEN)
Code: y4wsyws7
Link: https://proinvite.kraken.com/9f1e/11l9bp1z
Additionally we would be glad to consult anyone interested in getting involved here. As always we view these crypto currencies in the same realm as futures, high risk, high reward, and every portfolio should have a small percentage of their overall portfolio in investments like this.
So if interested please reach out to the email below directly and we can discuss this further. The future of financial payment systems will be digital decentralized and we are still in the infancy of this fascinating technology!
If anyone is interested in working on a digital currency project and joining in as a core investor to help lay the foundation for what is to come, please reach out!