Michael Saylor's MicroStrategy Raising Another $500M to Buy More Bitcoin
coindesk.com
coindesk.com
Has anyone here actually used MicroStrategy, the product/service offering? Is the software company behind it worth the implied $16B, or is MSTR essentially just a Bitcoin ETF with a really bad fee ratio? (I’m not even counting the $2B debt on their books)
Would I be dumb to do a long BTC / short MSTR pair trade?
yes because one of the legs can have unbounded losses
Remember too that Saylor popped the 1999 tech bubble when he was accused by the SEC of cooking the MicroStrategy company books. Settled for millions dollars in fines, and should have at that point been banned from ever running a public company, but hey, this is America. When they restated their books, he lost more money in a single day than anyone in history. [2]
Not sure he's really someone to be taken seriously. He's shown some questionable judgement, to put it mildly. Desperation will do that to you.
[1] https://www.macrotrends.net/stocks/charts/MSTR/microstrategy...
[2] https://www.nytimes.com/2000/12/15/business/microstrategy-ch...
Of course now that spot ETF is approved it changes the picture somewhat, but it looks like MSTR is still needed as an institutional vehicle for wrapping BTC.
(I think) Coindesk is one of the better ones...
Of course, it's plausible that he'll take out some massive loans to buy Bitcoin at the top of this current bull cycle and get himself into trouble regardless. Perma-bears and perma-bulls are equally clueless in my book. It's just an admission you have no clue how markets work.
As a store of value though vs gold it has more positives. Much easier to transport a billion dollars worth of btc than gold.
Much easier to self custody.
Truly limited supply, they pull more gold out of the ground every day.
The world literally just got together and decided BTC is what they want and the price reflects that. Its a fascinating case study just in that regard.
The video is here: Page is terrible, video is about 1/3 down
https://finance.yahoo.com/video/buying-bitcoin-buying-nyc-ap...
This is incorrect. From Coinbase SEC filings, retail trade is 1/8 of what it was in 2021, last time the price was this high.
Even as the price has risen over the course of the past year, less and less people have wanted bitcoin every day. We have the numbers on this from the largest actual-dollar crypto exchange.
Miners have hoarded coins since 2021 because if they sold them the price would cash. They took out loans against their mark-to-market value instead. (Two such lenders were Silvergate Bank and Signature Bank.) When you see sudden multi-thousand dollar crashes in the bitcoin price, it's often a miner having to dump.
The ETFs have taken in $10b net in their entire existence, and a lot of that seems to be churn from other bitcoin-exposed securities.
It's not clear you're informed on the market you're expounding on at such length.
Further, the same has been true for the Argentinian Dollar for decades.
Many other currencies that I could name as well.
Self custody is part of why Bitcoin is valuable -- self custodians deflating it by losing their keys. The other part is speculative hype.
What is the the underlying value if a dollar? Or euro?
On first sight, there is none. But when the IRS knocks at your door to collect taxes, you will need to cough up dollars. Or euros when you live in europe. Rubel, yen or gold won't do.
That provides the underlying value of the dollar. Or the euro.
Now what about BTC ?
When the ransomware hacker knocks at your door, you'll have to get bitcoin. Dollars or rubel won't do. That provides the underlying value of the bitcoin.
Maybe that's circular. Some people say the US dollar has value because it can be used to pay taxes.
With that said; there are few other assets that have accumulated this much value over their initial existence. BTC market cap just passed silver. Gold is a 10x away. So yes it absolutely has volatility but the greater trend is exclusively up with little sign of stopping.
Not sure why it's a good long-term store. It requires electricity to exist.
Its physical durability is established. You'll have no problems dealing with a 150-year-old coin, but I could see even things like "paper key/secret" storage falling apart if the appropriate ecosystem isn't there to restore access.
Its volatility is far less than BTC. The dollar still does better by that metric in non-dramatic times, but there's the implicit "if you're looking for alternative value stores, you've probably already turned up your nose to the dollar."
Offline cash in and out is still easier. Most communities have a coin dealer who will happily exchange dollars for sovereigns, or back. Yes, the spread is probably large, but I'd trust a cash-in-hand transaction with a local dealer a lot more than an exchange who will suddenly go into "we no longer offer fiat withdrawls, have some HappyFunCoin instead mode.
"Bitcoin has all the the metal's great attributes, but none of its problems."
Especially now that ETFs give access to Bitcoin to institutions that traditionally could not touch it.
Makes no sense to me.
One way to hedge against those crashes is to use your BTC as collateral to borrow against it, and then find ways to use those borrowed funds to compound your earnings. For example, you can borrow ETH, stake that for ~4%. Of course, you need to maintain your ratio, but that's actually quite easy. Worst case you just unstake your ETH, pay back your loan and you're out... or you add more BTC to up your ratio.
This way you're protected against crashes and disconnected from the actual value of the underlying asset (BTC). You're making that ~4% regardless of what the price of BTC is doing. Saylor is playing these sorts of financial games (probably not with ETH, but with other assets). This is how he has continued to double down on his purchases, without having to sell.
Today is just noise and a terrible example to try to make, which undermines your position on things. It went down more than that after the ETF and then boomed upwards. Zoom out on the chart a bit instead of looking at these micro events.
You've been dumping on BTC in this whole thread. You've got a lot of karma here, but your vision and hatred of crypto are distorting your views. My suggestion would be to spend some time understanding the macro economics a bit more.
The problem though is that long term, I'd argue that ETH is playing this game a lot better. If you can mentally get past the DAO failure and whatever other drama, programmable money, is the absolute future, especially since they solved the energy usage issue, and soon the scaling issues.
I don't even like Bitcoin and don't own Bitcoin because I have ethical concerns about it. Bitcoin promotes corruption of the socio-political system via extreme, massive-scale tribalism. That said, it's probably the lesser of two evils.
As an outsider, it's ironic to witness fiat proponents neglect the power of corruption which they themselves have been benefitting from to a far greater extent than Bitcoiners.
The side which can exert the most corruption (the will of their tribe), most quietly, will win. Likely Bitcoin since it has the support of the masses and business leaders. Fiat proponents can only blame themselves. They're the ones who made Bitcoin possible with their global ponzi.
I don't like the current system and I also don't particularly like where it's going but the trajectory is clear.
Could you elaborate on what you mean and the mechanism for this?
I've witnessed crypto regulators behave in corrupt ways, but it's impossible to prove bribery until they move or sell their ill-gotten crypto. Because, with crypto, you can receive tokens without your own approval. Someone could send you the passphrase of a wallet containing millions of dollars worth of Bitcoin, it could end up in your email spam folder and you could memorize it and, if ever questioned about it, claim you don't remember seeing that email. There would be zero evidence.
Yet if you remember the passphrase, the Bitcoin is yours.
Given Bitcoin's reason for existence, it's obvious for another reason that "without the the tradfi system, there would be almost no demand for Bitcoin": if everyone trusted that tradfi was a good system and working fairly for all members of society then bitcoin wouldn't have a reason to exist.
Bitcoin, like Trump's popularity, is an FU to a system that's reaching or reached a critical mass of people lacking trust in it.
And that doesn't mean it's good or bad or better or worse, what it means is that people are looking for an alternative to the perceived hopelessness of their futures if they 'stay the course'.
(1) Index funds purchase MSTR shares, driving up the price; (2) thus allowing Saylor to issue more debt to buy BTC, which drives that up; (3) MSTR shares appreciate due to its BTC holdings; (4) go to step 1 as funds need to rebalance and add more MSTR shares.
The weak points to this idea are definitely step 2 and even 3. MSTR won't be able to keep finding entities to buy its debt indefinitely, and MSTR is already trading well above what its BTC holdings' appreciation would justify, so there's some obviously unsustainable mania going on.
MSTR is essentially a leveraged, debt laden commodity trust rn, with a highly volatile commodity making up most of its balance sheet.
Their premium to NAV is indeed very high, and makes you think why would anyone buy that vs a BTC ETF. Perhaps if you think BTC goes a lot higher (and stays there) their ongoing leverage and the premium you pay for it now makes sense? Their debt is pretty well structured - v. low interest and matures a long time from now, but remains to be seen how long he can keep issuing it.
He also keeps saying he's never going to sell BTC, but I don't see how he's going to service his debt eventually if he doesn't sell. Unless he starts market making with the treasury or somehow putting it to work
it’s such a curious litmus test for something but I’m not sure exactly what.
religion
politics
they work because people believe they work
N may be five to seven digits.
Disclaimer: I actually dislike bitcoin (and other proof of work cryptos) very much, but the jury's still out on which side is more correct in their criticism of the other.
PoS ledgers seem like a better design, but they alone don't solve very uneven/concentrated token distributions that you end up with every monetary system
Crypto absolutely will not solve that specific problem of any monetary system. It may solve some others though, in addition to introducing many novel problems