Interactive Brokers: MicroStrategy benefits from a self-reinforcing feedback loop

Odaily Planet Daily News According to Steve Sosnick, chief strategist of Interactive Brokers, last week, MicroStrategy’s Michael Saylor’s strategy is the issuance of convertible bonds and the use of the proceeds to purchase BTC, which is actually the definition of Margin Trading—borrowing money to purchase financial assets. This method is very effective when the price of the asset moves in a direction favorable to you, and BTC’s performance is quite impressive. However, if it moves in the opposite direction, this method will collapse in an unpleasant way. Steve Sosnick emphasized that MicroStrategy benefits from a “self-fulfilling feedback loop.” It purchased more BTC, helping to push up the price, and then sold more debt and stocks to buy more BTC, further driving up the price. But such things never last forever and often end in a bad way—the question is when? The short-term answer seems to be not yet.