Why MicroStrategy's best days are behind it & Saylor's role in Bitcoin

MSTR’s golden era was pre-ETF containment. Post-ETF, the State wants standardized, surveilled rails—not a charismatic CEO with a reflexive balance sheet removing float.

Oct 15, 2025

black elephant — Photo by Tarek K on Unsplash

Executive read (what matters in one page)

Thesis: Before spot-Bitcoin ETFs, MSTR was the State’s containment valve: a public-equity proxy that soaked “number-go-up” demand on surveilled rails without normalizing self-custody.
Post-ETF: the cleaner lane is ETF plumbing (centralized custody, AP/MM control, halt switches, basis trades). A CEO-directed corporate that removes coins from float is now a flow competitor to ETFs. Gatekeepers prefer ETF wrappers over corporate balance-sheet BTC inside core benchmarks.

Implications:

Let QQQ keep MSTR (rules-based), block S&P 500 (discretionary) → avoid forcing Bitcoin proxy into widows-and-orphans accounts.
Narrative framing: “idiosyncratic, leveraged software” → suppress passive flows & optics.
Price mechanics: with ETFs + CME futures, squeeze dynamics are capped (borrow supply, options depth, basis arb).
Saylor’s role: normalized paperized exposure; now pushes “BTC = Store of Value (not Medium of Exchange)” which aligns with containment. Refuses Proof-of-Reserves normalization that would discipline the entire paper stack. Imagine if MSTR normalized Proof-of-Reserves, then most, if not all Bitcoin treasury companies would have to follow.

Trade stance: MSTR remains a high-beta torque on Bitcoin, but structurally inferior to holding spot/ETF rails for long-only flows. Use selectively; don’t anchor your Bitcoin exposure on a committee-gated corporate.

Flow map: Pre-ETF vs Post-ETF

Pre-ETF (2020–2023/24):

Objective: channel BTC demand into regulated brokerage rails.
Tool: MSTR as proxy + converts + media halo → retail & institutions “own BTC” without keys.
Side-effect: MSTR’s buy-and-hodl removes float; reflexivity fuels premium.

Post-ETF (2024→):

Objective: standardize BTC exposure under custodian/AP surveillance, enable basis control, halts, coordinated hedging.
Tool: Spot ETFs + CME futures + custodial concentration.
Policy preference: ETF flows, not a discretionary corporate hoovering supply.

Index-policy mechanics (why S&P ≠ QQQ)

S&P 500 = discretionary committee (representativeness, earnings quality, sector balance). It can exclude a BTC-heavy corporate to avoid importing crypto beta into the core benchmark.
Nasdaq-100/QQQ = rules-based rank (non-financials). As long as MSTR qualifies on rules and rank, it stays — until (a) rank slips, or (b) classification drifts to “financial”.
Gatekeeper reveal: “We will not normalize BTC-as-treasury inside S&P core.” That keeps the forced passive bid away from MSTR and pushes flows to ETF wrappers.

What would falsify this:

S&P admits MSTR without methodology tweaks → containment softened.
MSTR’s software cash flow becomes economically primary (BTC marks minority) → optics repaired.
G-7 reserve adoption of BTC → ETF-only containment weakens.

Microstructure now (why torque is capped vs 2021)

Borrow & options depth: APs/MMs can short synthetics (ETF/futures) vs cash; borrow terms are managed → squeeze ceilings lower, gamma traps containable.
Halt & collar tools: venues can cool retail feedback loops.
Basis plumbing: futures/ETF basis enables paper supply to meet spikes without spot scarcity.
Result: MSTR can spike, but the ecosystem is built to cushion reflexive blow-offs.

Saylor’s role (as actually incentivized)

Phase 1 (useful): Made BTC “investable” in IR-safe language; normalized paper Bitcoin in brokerage accounts.
Phase 2 (post-ETF): Store-of-Value-not-Medium-of-Exchange talking points align with containment; Proof-of-Reserves avoidance prevents a standard that would force discipline (treasuries, ETFs, custodians).
Why no Proof-of-Reserves normalization:
- PoR would expose any rehypothecation/custody shortfalls across the stack.
- It would pressure custodians & ETFs to show on-chain audits — unwanted by the paper ecosystem.
Risk channel: “get out of line” → eligibility, margin, audit, or index levers can punish the equity. Everyone understands the boundary.
NOTE: I am not alleging that Saylor has knowingly done anything. I care about the investment angle only, and the end result is the same regardless.

The signals (what to watch that actually changes this)

Red-flags for MSTR bulls:

GICS/eligibility language inching MSTR toward Financials (QQQ excludes financials).
PB margin circulars increasing haircuts on MSTR equity/options (retail leverage suppression).
Tight borrow + high cost-to-borrow into rebalance windows (harder to run squeezes).

Green-flags / falsifiers:

S&P inclusion without methodology edits.
MSTR software regains primacy in revenue/cash contribution.
Major sovereign BTC-reserve signaling (breaks the ETF-first flow hierarchy).

Scenarios & odds (12–24 months)

Status quo containment (base, ~60%)
S&P door stays shut; QQQ keeps MSTR until rank/eligibility flips; ETF share of BTC supply rises; MSTR trades as high-beta BTC with policy overhang.
Tightening (25–35%)
Eligibility/classification tweaks or rank slippage push MSTR out of QQQ; margin/borrow frictions increase; flows consolidate further into ETFs. Torque persists but liquidity quality deteriorates.
Softening (10–15%)
S&P admits MSTR or big sovereigns validate BTC reserves; MSTR’s passive bid improves; Proof-of-Reserves discourse unexpectedly gains traction.

Trade construction (how to express the view)

If you want BTC exposure (flow-aligned):

Self-custody for regime-change convexity; ETF (deeper options, cleaner borrow). Buy fear dips on policy scares.

MSTR as torque (not core):

Use event windows (ETF net-inflow surges, BTC narrative spikes) when borrow is benign.
Avoid sizing MSTR through rebalance weeks or when PB haircuts rise — your edge gets monetized by someone else.

Containment-aligned equity sleeve:

Overweight policy-grade platforms (PLTR, MSFT Gov/Entra/Compliance, PANW) that benefit from the same rails being built to domesticate BTC.
Underweight ungoverned AI & manual, services-heavy Systems Integrators (no lineage/admissibility).

Current outlook: PLTR > Bitcoin > Gold > MSFT > PANW.

“How this breaks” (real disconfirmers)

Proof-of-Reserves standard emerges (market-driven or regulator-nudged). Custodians/ETFs publish verifiable on-chain proofs; MSTR either complies or bleeds narrative. Paperization becomes disciplined, upside may decouple.
S&P capitulates and adds MSTR without rejigging methodology. That would mean passive adoption trumped containment optics.
MSTR diversifies into a real cash-flow software platform again (not just a treasury wrapper). Then it’s no longer “a BTC proxy with a software hobby.”
Sovereign reserve signaling (G-7) blesses BTC as a macro reserve slice → ETF-only funnel becomes one of several lanes.

Until at least one of those happens, follow revealed preference: to steer mass flows to ETF wrappers (control > fairness), to keep MSTR out of S&P (stability > truth), and to manage BTC’s macro-vol through paper depth (incentives > ideals).

Bottom line

MSTR’s golden era was pre-ETF containment. Post-ETF, the State wants standardized, surveilled rails — not a charismatic CEO with a reflexive balance sheet removing float. Treat MSTR as levered beta with gatekeeper risk, not the canonical on-ramp. If you’re playing the real game (incentives > ideals), you already know where the durable bids are: the rails and the policy OS that make this containment regime run.

Other articles I’ve written on Bitcoin & Gold:

Other articles I’ve written on investing:

Subscribe:

Share: