MicroStrategy Says It Has the One Thing JPMorgan Lacks

Strategy, formerly MicroStrategy, says 91% of its balance sheet rests on money nobody can take back. JPMorgan runs on deposits customers can pull any day. Strategy calls that the safer design.

The claim comes from a slide that the company put in front of investors. It puts Strategy’s short-term funding gap at zero and JPMorgan’s at negative $1.2 trillion. Strategy wrote those definitions itself.

“MSTR inverts TradFi,” says Strategy.

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What MicroStrategy Says JPMorgan Cannot Do

Banks borrow short, lend long, and deposits can vanish in a day. Additionally, sometimes loans take years to come back, which is why insurance, regulators and central bank credit exist to cover that gap.

Silicon Valley Bank customers asked for $42 billion on a single day in March 2023, a quarter of its deposits. Regulators closed the bank the next morning.

The case for MicroStrategy is that it has no depositors. It owns 845,050 Bitcoin (BTC), funded mostly through perpetual preferred stock issuance. Those shares pay a fixed dividend and never mature. Its September 8 filing shows nothing due inside 12 months.

What the Comparison Leaves Out

Start with the 48%. JPMorgan’s June filing reports $2.71 trillion of deposits against $5.02 trillion of assets. That is 54%. The smaller figure is a bucket that MicroStrategy picked.

BeInCrypto found the same habit last week, when Strategy’s reserve capital versus Berkshire claim ran ahead of its own filing.

Now the asset side. MicroStrategy paid an average of $75,415 per coin. Bitcoin trades near $78,498 as of this writing. Its entire $66.8 billion stack sits barely 5% above cost.

The bills still arrive. Strategy paid $400.7 million in preferred dividends in the second quarter alone. It keeps a $5.10 billion cash reserve to fund those payments and its $6.71 billion of debt.

That cost showed this summer, when MicroStrategy bought no Bitcoin for 10 weeks into late August, raising $3.28 billion in dollars and spending none of it on coins.

Notwithstanding, nobody catches Strategy if Bitcoin slips. Deposit insurance and Fed lending halted the 2023 bank runs. Bitcoin fell 77% from its 2021 peak to its 2022 low, and Strategy has already mapped what breaks first.

Both designs can break. One dies from a crowd at the door. The other dies from one price chart and a dividend it cannot skip.

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