🍿POPCORN ALERT 🍿

It looks like a big showdown is brewing on $MSTR 👀⚠️

- on one side a big group of Hedge Funds are heavily short on the stock vs long $BTC (they tried to harvest the fat premium of the stock vs #Bitcoin)

- on the other side heavyweight asset managers like Allianz built big long positions on $MSTR securities like its convertible bonds

We saw a similar situation many times in the past years and I hardly remember one when Hedge Funds came out as winners

In my opinion, Hedge Funds used their market-making activities with retail brokers to build the short positions, the reason why retail brokers are now jacking up the margin requirements on retail investors' long positions on $MSTR in their best effort to avoid a $GME repeat

What happens if $MSTR starts squeezing? Initially, this will create some selling pressure on BTC due to Hedge Funds being forced to sell their longs, however, I believe the likes of $IBIT can easily absorb this. On the other hand, the extent of HF exposure cannot yet be quantified. Currently, FINRA reports 10% of $MSTR shares sold short on exchange and ~38% off-exchange for a total of ~27.5M shares or more than 10bn$ equivalent at current prices.

Last Friday $MSTR closed 13.22% up in a single day in what was likely the beginning of the squeeze effort of heavyweight institutions against hedge funds. This time though retail investors are on the same side as heavyweight institutions and a combination of the two can really break havoc in the HF space (and on their Prime Brokers - Archegos style). Paradoxically the showdown can reach its climax on the 13 January EXACTLY 4 years after the epic $GME squeeze started.