A special RWA model: currency-stock linkage RWA of US stocks and Hong Kong stocks

Original title: "A special RWA model: Coin-stock linkage RWA of US stocks and Hong Kong stocks"

Original author: Ye Kai (WeChat/Twitter: YekaiMeta)

The concept of RWA (Real World Assets) was very popular some time ago, but the RWA products of licensed exchanges have not been expanded and implemented, and it is only limited to the RWA case of Defi's U.S. debt-pledged interest-earning assets; Recently, BlackRock also entered the RWA track after in-depth layout of Bitcoin spot ETF, and then RWA became popular again. But because RWA is more oriented to the 2B institutional market, how to design it into a 2C retail market? This problem still limits the expansion of RWA.

Given that RWA is a fusion product of virtual assets and traditional finance, in addition to RWA that is tokenized for physical assets, there is actually a special RWA model. It is the RWA model where currencies (virtual assets) and stocks (traditional financial stocks) are linked. This model can be directly oriented to retail investors, and there are already mature cases with obvious effects. Let’s analyze it here to see if it will develop into an RWA product in the future?

The RWA model of currency-stock linkage is simply the linkage between traditional financial stocks and virtual assets. The stocks of listed companies are allocated through investment with virtual assets, Web3 The linkage of the layout, while the price or value of virtual assets mainly Bitcoin continues to rise, it also drives the stock value of listed companies in the real world to double. This linkage growth is often a doubling or a premium.

U.S. stock micro-strategy case analysis

First, let’s take a look at the Bitcoin stocks in the U.S. stock market , the most typical one of the American Bitcoin stock concept stocks is the micro strategy. MicroStrategy (MSTR) is heavily invested in Bitcoin and is a Bitcoin concept stock in the US stock market. MSTR continued to add positions after entering virtual assets in 2020, not only at the high point of the bull market in 2021, but also at the low point of the bear market at the end of 2022. Its methods of heavily positioning Bitcoin mainly include: lending out Bitcoin positions to make a profit, issuing long-term bonds to purchase Bitcoin, issuing additional shares in the secondary market to raise funds from the secondary market, using investors' money to increase positions in BTC, and at the same time using the cash flow from the main business. Come and add BTC. The effect of the currency-stock linkage is that since January 23, 2024, the stock price of MicroStrategy (MSTR) has increased five times as the price of Bitcoin has increased.

Based on MicroStrategy (MSTR)’s announcements and operations related to Bitcoin allocation or purchase in the past two years, we conducted a detailed analysis of its currency-stock linkage trading logic and techniques.

1. Strategic Positioning

MicroStrategy regards Bitcoin as its primary financial strategy For one, he believes Bitcoin is a long-term store of value that helps hedge against inflation risks. Therefore, starting in 2020, MSTR made its strategy of buying and holding Bitcoin clear through announcements.

2. Continue to increase positions

MSTR has announced through announcements many times in the past two years Buy Bitcoin, whether the market is in an up or down cycle, whether it is at a bull market high or a bear market low, stick with it. This shows that the company has adopted a long-term and continuous position-building strategy rather than short-term speculation.

3. Multi-channel financing

MSTR adopts a variety of financing methods to purchase Bitcoin ：

·Issue convertible bonds: Raise funds through the issuance of convertible bonds for the purchase of Bitcoin.

·Issuance of senior unsecured bonds: Further raising capital through the issuance of senior unsecured bonds.

·Issuance of additional shares in the secondary market: Financing in the secondary market through the issuance of additional shares.

· Use cash flow: Use your company’s cash flow to make Bitcoin purchases.

·Lending your Bitcoin holdings to make a profit: Use your Bitcoin holdings to lend out to gain additional income.

4. Flexible response to market fluctuations

MSTR has performed bits in different market cycles. The purchase of Bitcoin demonstrates its confidence in the long-term value of Bitcoin and also reflects the company's flexible response to market fluctuations.

5. Transparent Announcement

MSTR determines the time, price, and Both the quantity and total holdings are announced, maintaining a high degree of transparency and helping investors understand the company's Bitcoin strategy and holdings.

6. The correlation between stock price and Bitcoin price

Because MicroStrategy holds a large amount of Bitcoin , the company’s stock price is closely related to the price of Bitcoin. When the price of Bitcoin rises, a company's stock price usually rises with it, and vice versa.

Summary

MicroStrategy's trading logic is mainly reflected in its belief in the long-term value of Bitcoin. The company has closely linked its financial strategy with the price of Bitcoin through continuous increase in positions, multi-channel financing and highly transparent announcement strategies, which has also increased the volatility of its stock price. This series of operations by the company not only brought it financial benefits, but also made it an important channel for investors to participate in the digital currency market.

MicroStrategy's stock price is closely related to the price of Bitcoin, mainly because the company holds a large number of Bitcoins and continues to increase its positions. When the price of Bitcoin rises, the value of the Bitcoin held by the company increases, which is reflected in the company's market value, thereby driving up the stock price. Conversely, when the price of Bitcoin falls, the value of the Bitcoin held by the company decreases, and the stock price will also be affected.

In addition, the company has raised funds to purchase Bitcoin through the issuance of bonds and additional shares, which has also increased the market's expectations for the company's stock price to be linked to the price of Bitcoin. Investors believe that as the number of Bitcoins held by the company increases, its stock price will be more affected by Bitcoin price fluctuations.

In general, MicroStrategy has closely linked the company's stock price with the price of Bitcoin through a series of operating methods, making the company a way for investors to participate in the Bitcoin market, while also increasing the volatility of the company's stock price.

Hong Kong Stock Boyaa Interactive Case Analysis

Similarly, we analyzed Boyaa Interactive's trading logic and methods based on the public announcement content of Boyaa Interactive (0434.HK):

1. Announcement of the purchase of cryptocurrency:Boyaa Interactive issued a voluntary announcement on August 10, 2023, announcing plans to invest US$5 million in the purchase of cryptocurrencies, mainly Bitcoin and Ethereum, in the next year. This announcement shows the company's positive attitude towards the cryptocurrency market and has also attracted the attention of the market.

2. Expand the scale of investment:On November 13, 2023, the company proposed to increase the total amount of cryptocurrency purchases to US$100 million, and obtained shareholder approval at the special general meeting of shareholders on December 22, 2023. This move shows the company's further determination in cryptocurrency investment.

3. Purchase implementation and announcement:In the announcement on March 8, 2024, the company disclosed the specific purchase situation, including the number and average price of Bitcoin and Ethereum purchased, as well as the purchase of Tether (Note: the total purchase price at that time was more than US$90 million, of which the purchase price of Bitcoin was US$41,790). This transparent disclosure of information helps to increase market confidence in the company's actions.

4. Stock price linkage strategy:By openly and transparently disclosing cryptocurrency purchases and investment plans, Boyaa Interactive takes advantage of the volatility and volatility of the cryptocurrency market. Popularity attracts investors' attention, thereby driving up stock prices. The company regards cryptocurrency investment as an important part of the company's asset allocation, and combines it with the company's Web3 business layout to form a linkage between Bitcoin price and stock price.

Based on the above analysis, Boyaa Interactive’s trading plan for linking Bitcoin price and stock price can be summarized into the following steps:

1. Develop a cryptocurrency investment plan: Clear the investment goals, scale and main investment objects (such as Bitcoin, Ethereum, etc.).

2. Disclose the investment plan openly and transparently: Announce the investment plan to the market and investors through announcements and other forms to increase market attention. .

3. Implement the purchase step by step: According to the market conditions and the company’s capital situation, implement the purchase of cryptocurrency step by step and adjust the investment in a timely manner Strategy.

4. Regularly update investment status: Regularly disclose specific purchases and positions to the market to enhance transparency.

5. Combine business layout: Combine cryptocurrency investment with the company’s Web3 business layout to form a synergistic effect and promote stock price growth .

Through such a trading plan, Boyaa Interactive took advantage of the popularity and volatility of the cryptocurrency market to attract market attention and achieve a multiple increase in the stock price (from 2.5 billion to HK$1.7 billion). At the same time, it also provides financial support and strategic coordination for the company's layout in the Web3 field.

The last thing I want to say is that currency-stock linkage is a special RWA model, which successfully combines financial assets in the virtual world with financial assets in the real world. With the integration, it can directly face retail investors, making it easier for institutions, enterprises and retail investors in the real world to understand and accept it, and it can also achieve a multiplication effect of even ten or a hundred times. I believe that more and more RWA trading plans for Bitcoin stocks will emerge, which will also promote the emergence of more RWA models and products.

This article is from a submission and does not represent the views of BlockBeats.

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