Bitcoin News: Retail Investors Lose $17B in Indirect Bitcoin Bets, Says 10X Research
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Retail investors lost $17 billion attempting to gain Bitcoin exposure through firms like Metaplanet and Michael Saylor’s Strategy, driven by excessive equity premiums. A new report reveals significant losses for retail investors now. Specifically, they lost an estimated $17 billion in indirect Bitcoin bets. This was during the process of pursuing exposure using digital asset treasury firms. These firms have Metaplanet and Michael Saylor’s Strategy prominently. The losses are mostly due to excessive premiums for equity, to begin with. Metaplanet Valuation Falls to Match Actual Bitcoin Holdings The equity premiums made it possible for these companies to issue shares now. Consequently, the valuations were way ahead of their actual crypto holdings at that time. What’s more, their prices have gone on to collapse dramatically. This decline left the bag held by a multitude of individual investors. Therefore, this brings to light the risk of purchasing the stocks of crypto-heavy companies. Related Reading: BTC News: Metaplanet’s Value Drops Below Its Bitcoin Holdings | Live Bitcoin News According to analysts at Singapore-based 10X Research, the financial magic is coming to an end. They made this observation in a report released on Friday. In the past, Bitcoin treasury companies were able to successfully build huge paper wealth. They did this through issuing shares at inflated values easily. This practice resulted in an obvious overpricing of share premiums at the onset. The report argues that investors paid much more at that time. Specifically, they paid masses more than the actual value of the underlying Bitcoin. Metaplanet, which is the fourth-largest bitcoin treasury company, is a good example of this. Its market capitalization is down considerably recently. Consequently, the valuation is more closely tied to its Bitcoin holdings. Furthermore, there is the case of MicroStrategy, led by Michael Saylor, that went through a similar cycle.…
