Underwear exposed! The asset Wall Street is most bearish on is it—if $BTC drops below $8,000, the entire game could be over?

The median short position in the S&P 500 index components has risen to one of the highest levels in nearly a decade, reaching 2.7%.

Among all the components, a company called MicroStrategy has the highest short interest, accounting for 14% of its market value. Another crypto exchange, Coinbase, ranks fourth with 11%.

This means that among large U.S. companies with market caps over $25 billion, MicroStrategy is currently the least favored.

Market observers note that this bearish sentiment is not unfounded. A senior investment banker once analyzed that, while MicroStrategy does not face a run risk in the short term, its business model has fundamental issues.

The model cannot generate cash flow and requires continuous financing to buy more $BTC, which dilutes common shareholders’ equity. Additionally, the company tends to buy $BTC when prices are high, representing a systemic weakness.

Of course, not all short positions are purely betting against the company. Some hedge funds may use it to hedge their holdings of $BTC spot positions.

But in any case, this indicates a market consensus that if $BTC prices fall, MicroStrategy will struggle to survive.

The company’s core logic, built by founder Michael Saylor, is a three-layer “digital asset” system. The first layer is $BTC, called “digital capital.” The second layer consists of various perpetual preferred stocks issued by the company, called “digital credit,” which pay high interest. The third layer is “digital currency” issued based on this, such as stablecoins.

The operation of this system heavily relies on a belief: that $BTC prices will rise indefinitely over the long term.

Its mechanism can be compared to U.S. Treasury bonds. The U.S. issues bonds based on its national credit, paying interest and rolling over debt as needed. As long as the dollar remains strong, the game can continue.

For MicroStrategy, the long-term appreciation of $BTC is its “national credit.” As long as $BTC rises and boosts stock prices, the company can continue issuing new shares to raise funds, buy more $BTC, and pay interest, creating a cycle.

Michael Saylor firmly believes $BTC will change everything, with its upward potential even more certain than “the U.S. will always win.” Therefore, he is willing to anchor on this “destined” appreciating asset and issue new credit currencies, similar to the gold standard dollar of the past.

The company’s CEO has stated that they would only be forced to sell holdings if $BTC prices stay below $8,000 for four to five years. If that happens, the entire industry could face severe tests.

Even traditional bankers have to admit that MicroStrategy does not face a short-term financial crisis. But for traders, shorting this system—dependent on $BTC rising during a down cycle—is a logical choice.

Currently, the market seems to lack strong reasons to be bullish on it.

An interesting paradox is: Michael Saylor uses dollars to buy $BTC and pay interest, yet he tries to challenge the dollar system itself with this billion-dollar system.

Wall Street might scoff at this, caring only about stock price movements, not whether this company becomes a century-old enterprise.

Saylor believes $BTC will keep reaching new highs, using it as a foundation; dollar holders believe in America’s continued strength, tolerating debt expansion. Both are bets based on faith, with no inherent superiority.

Meanwhile, elsewhere, a new infrastructure narrative is brewing. For example, Sui’s storage layer project Walrus is combining AI with decentralized physical infrastructure networks (DePIN), aiming to provide new solutions for data storage. Such projects represent ongoing exploration at the application and infrastructure layers, forming a complex landscape alongside macro asset narratives in the crypto world.

#Walrus $WAL #Sui #DePIN @Walrus

Follow me for more real-time analysis and insights into the crypto market! $BTC $ETH $SOL

#Celebrating New Year at Gate Square

#CryptoMarketRebound