This week, Michael Saylor revealed that Strategy chose to repurchase its convertible bonds instead of investing further in Bitcoin. While surprising to some, this decision is actually a sound financial strategy.
Crypto analyst Darkfost believes this situation signals a potential problem in the stock market. The difference in returns between stocks and bonds is now at its lowest point since the early 2000s, during the dot-com boom and bust.
The Equity Risk Premium and What It Means for Bitcoin
As a researcher, I often think about the equity risk premium – that’s the additional return investors demand for choosing stocks over safer investments like bonds. Basically, it’s the reward for taking on more risk. When this premium gets smaller, stocks don’t look as appealing compared to those safer, fixed-income options.
According to Darkfost, the difference between stock prices and underlying value is currently at its lowest point in over two decades. He notes this isn’t simply a case of overoptimism, as higher interest rates and the market’s search for fair prices are reducing the typical benefits of investing in stocks.
According to an analyst, investors are likely to start shifting money out of stocks soon. While the timing and extent of this change are unclear, current market data suggests increasing risks for stock investments.
He argues that MicroStrategy buying back its bonds isn’t a sign of doubt about Bitcoin, but a smart financial move. The company is repurchasing its own zero-percent convertible notes due in 2029 at a discount – spending about $1.38 billion to cover $1.5 billion in value. This reduces the potential for future stock dilution and strengthens the company’s financial position.
Strategy planned to repurchase about $1.5 billion worth of its notes, and suggested Bitcoin sales as a potential way to fund this. In a May 21st interview, Saylor indicated he might sell some Bitcoin before the end of the year to help cover the cost.
Accumulation on Pause After a Huge Week
This bond repurchase comes after one of Strategy’s busiest weeks for Bitcoin purchases. As CryptoPotato reported, the company bought 24,869 BTC for approximately $2.01 billion on May 18.
With this latest purchase, the company now holds a total of 843,738 Bitcoin, averaging a purchase price of approximately $75,700 per Bitcoin.
Bitcoin is currently valued at approximately $77,000, which represents a slight decrease of about 0.8% over the past 24 hours. It’s also considerably down from its peak price of over $126,000, reached in October 2025 – currently about 39% lower.
According to Darkfost, Bitcoin and similar assets might see an increase in value if investors start shifting money away from stocks. However, he also noted that this money could just as easily go into bonds, which are currently offering attractive returns.
But he didn’t doubt Saylor’s reasoning. Buying back bonds at a lower price, while understanding the risks of the stock market, doesn’t seem like something someone acting irrationally would do.
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2026-05-26 18:25