Topic: MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 12. (Read 14269 times)

This was one of the points in the Micheal Taylor Decalogue to allow for a Bitcoin appreciation:


Micheal Salyor decalogue for a 10x Bitcoin Appreciation


Good and bullish news, if they get the law approved. (big if).

Apparently, soon companies that are holders of bitcoins will have to allocate their assets to separate balance sheet items and fix fluctuations in value as an increase or increase in net profit., this proposal was made by American accounting legislators. This also applies to MicroStrategy, which will undoubtedly lead to sharp fluctuations in profits depending on the market value of the cryptocurrency, the final decision on this issue is planned to be made in mid-2023.

https://news.bloomberglaw.com/financial-accounting/crypto-value-swings-to-hit-company-income-under-accounting-plan

Given the raise in rates, the worsening of credit spreads, and the bear market on our orange coin, I checked how the Microstrstegy debt was going.
Well, as expected, not very well: on the following spreadsheet some details:




Almost 19% yield for a three years convertible investment in Microstrategy. Not bad at all! Something to dump on the next bull run!

I don't need to.  I already said what I had planned to say and sufficiently backed up what I said to the extent necessary to make my point(s).


You can say whatever you like... and choose the extent to which you are going to back up what you say or just speak in vague conclusions without backing anything up and appearing as if you have not read up on the topic in which you wrote.  Those are your choices.


No.. You do not make very much sense.    The essence of MSTR's situation (as told by Michael Saylor and led by Saylor) is that Saylor had been somewhat critical and dismissive of bitcoin prior to 2020; however, the market performance of March 2020 and some of the fall out of the thereafter Fed money printing and seemingly irresponsible monetary policies of the Fed, US Govt and other governments triggered Saylor into investigating into bitcoin and even realizing various strong aspects of bitcoin's investment thesis as compared to fiat and/or various other places in which Saylor/MSTR could put its money (or its then decently large size cash reserves that Saylor characterized as being something similar to a melting ice cube in terms of the likelihood of dollars and/or dollar related assets to hold value in the long term).

Saylor started buying in about July 2020 - and admits to buying around 17k bitcoin around that time (which would have been around $9k or maybe less than that per bitcoin), and then MSTR started buying around August 2020 (right before the beginning of this thread), which was around 30k bitcoin for around $10k.. details are in the OP and subsequent earlier thread posts.  So over the last more than 2 years, MSTR has continued to buy BTC and also to incorporate a variety of financial instruments (and even attempting to be creative with some financial instruments) in order to continue to buy BTC and also to attempt to leverage their buys.. and so currently has around 130k BTC with around a $31k average price per BTC.

You seem to be trying to suggest that the smartness of an investment can ONLY be concluded if the investment is in outrageously high levels of profits - which of course is a ridiculous statement for a variety of reasons in terms of assessing any investment approach and attempting to put it into a proper context.  You seem to be spurting out a lot of lack of context assessments in regards to MSTR rather than really contributing any kind of perspective that is even close to being as valuable as you want to suggest it to be... and at the same time, you are free to make whatever assessments that you like, just as I am free to criticize your assessments for being as lame as they seem to be.

Now if you are wanting to talk about MSTR for some specific reason to suggest that MSTR is not a good investment, then there is nothing wrong with that - quite a few active forum participants would likely prefer to own bitcoin directly rather than investing in MSTR - even though there are some kinds of investment funds that have many difficulties in terms of directly buying bitcoin.  Hopefully for your own sake, you are not buying as much of the nonsense that you are spouting and that you, on a personal level, have at least bought some bitcoin in order to attempt to sufficiently and adequately prepare yourself for up.. rather than really believing the doom and gloom implications that you seem to be suggesting in connection with bitcoin's current investment thesis.

Your arguments are certainly "strong" ))
1. let's do it this way, to begin with, argue with reason that what I wrote is nonsense, as you put it. No arguments - write "I just love MSTR and I'm very sorry when they offend her and tell the truth about her"
2. Give arguments that in the current situation, it is possible to guarantee investment interest in cryptocurrency in general and bitcoin in particular? As far as I remember, the purchase of the specified volume did not take place at the bottom of the course ... And it seems to me very risky to rely on the short-medium term growth of bitcoin. In the long term - you can mortgage anything, because. in the current situation, it is virtually unrealistic to predict what will happen to the cryptocurrency in 10-15 years.
What I was leading to - I don't remember that MSTR bought bitcoin when they cost 1 cent ... And when it cost $ 1.. and even when it was 5 dollars - I don't remember that they bought. Does it make sense?

I said it many times.
Microstrategy is was a dead company that found a new life in its Bitcoin Strategy. They will be the next Century Berkshire Hathaway, who shifted from tactile manufacturing to a financial conglomerate.

So Microstrategy is shifting away from "business intelligence software" toward a bitcoin conglomerate.

Maybe you should try reading the thread, or updating yourself in regards to what MSTR has been up to since the time that OP of this thread was first posted (more than 27 months ago)?

There is way more going on with MSTR than what seems to be boiled into your summary and your general questions regarding "how things be going with MSTR?.. blah blah blah?   --- also your nearly meaningless and questionably informed nonsense that seems to be excited merely because the BTC price is down, and you seem to be hoping/expecting the BTC price to continue to go down from here, which may or may not happen.. even though admittedly there are quite a few happenings in the space and even macro-factors that seem to continue to put down price pressures on BTC.

I’ve been watching the crypto market lately, and I’m thinking “How are MicroStrategy doing there, who bought bitcoins for $250M” ?!
I will not talk about the reasons for the next market drawdown, everything is very interesting there, and this is the topic of a separate thread.
The question is - how do MicroStrategy investors assess risks, and how do external investors assess MicroStrategy's "financial behavior"? Let's be honest - such a move for a company whose key "product" is "providing business intelligence to customers" looks, to put it mildly, not very, hmm ... reasonable or what?

I am going to breach the two posts in a row rule, since it has been a couple of days since my last post - which I believe that the passage of time might be an exception to the double post rule... and I am wanting to raise some new points that I have been kind of thinking about in the past days, even though they are somewhat related to my last post.

Essentially, I just wanted to say that I just noticed that in early September Saylor/MSTR had disclosed that they were going to sell $500 million of MSTR equity rather than the $200 million amount that I had used in my buying on the dip example above.  Yet at the same time, I still have not really heard much if any news of their having had bought much if any BTC since early September, which likely means that they could have a decent size budget for buying more BTC.. That is if they had actually followed through with the selling of the additional $500 million equity as was in the original disclosure. 

Of course, there was one purchase of around $6 million in mid-to-late September in which they bought 301 BTC in the $19.5k price arena to put them over 130k BTC, so they still may have a lot of that $500 million - if they have already ended up selling some MSTR equity?

I kind of already grown attached to my buying on the dip laddering example from my earlier post.. which would be $15 million for ever $1k drop in the BTC, price, and of course, there are quite a few ways that such buying on the dip laddering approach could be supplemented, including but not limited to adding more to the buying amounts by increasing the amounts or even buy tightening the laddering increments, every $500 rather than every $1k or even front loading it in the event that it might be determined that preparing for such long-shots, such as $3k BTC prices is not a good way to allocate fiat that is sitting on the sidelines,

Another thing that they could do is to just allocate some of their budget to a more rigid DCA, whether that is buying daily (like El Salvador is doing) or buying weekly. 

I have no problem with either daily or weekly buys when the amount that might be bought would be considerably more than the normie amounts of $10 per week or something like that.

Like I mentioned in the El Salvador thread, there could be a way that MSTR/Saylor were to tie a daily buy amount to their average cost per BTC... so if MSTR's average cost per BTC is currently in the $30,638 price arena (as fillippone calculated in this post), then maybe MSTR could use their average cost per BTC as a way to figure out how much BTC that they would buy - whether that be daily, weekly or some other interval.. and they could even use a multiplier if they wanted to buy more BTC during any periodic basis that they might choose.

For any of us normies, we might want to start some kind of a similar BTC buying behaviors, too.. and it might even be more justifiable for anyone who might be underwater.. but anyone could join into such a DCA solidarity activity... I am going to have to think about if there might be some kind of a plan that I might want to implement... but mine would be much smaller amounts than either the 1 BTC per day that El Salvador is doing or my proposal of a DCA plan that MSTR could adopt.

I go to a similar place logically aysg76 in regards to both of those points that you seem to be making, and I think that each of your points need to be fleshed out a bit more in order to attempt to describe some dynamics that some of the mainstream pundits seem to be missing in regards to how they keep wishfully asserting that Saylor/MSTR to be more vulnerable than they likely are.

We get used to some of the BIG players exaggerating their position and even proclaiming that they are in a much stronger place than they are, so the fact that we have a lot of smoke and mirror bullshit artists in the world who are overstating their claims, the Michael Saylor/MSTR naysayers like to project Saylor/MSTR to be in the same place, which it is likely NOT true that he/MSTR is in the same kind of a vulnerable place unless he happens to be lying to us about some of his assets and/or his debts, and I surely am not going to put Saylor in the same bucket as Do Kwon, or SBF, or even Vitalik - and the other players who were and some of them continue to play shell games to suggest that they have way more assets than they do and they rely upon the ongoing pump in order to keep their scam and their little (or BIG) house of cards standing.   It is true that Saylor/MSTR might have fewer assets and more debt than what they are disclosing, but there is no real evidence of that beyond looking at the other scammers in the space and trying to project similar kinds of behaviors onto Saylor/MSTR.  

Let's take your first issue regarding the value of Saylor/MSTR continuing to buy BTC as the price goes down in order to continue to put themselves into a stronger position to be able to withstand even lower BTC prices without necessarily retaining enough collateral to sustain their loans, and let's say that it is actually true that Saylor/MSTR would run out of unencumbered BTC to prevent themselves from being liquidated at $3k-ish.  

But if Saylor/MSTR were to continue to buy BTC as the BTC price goes down to $3k-ish, and let's say that they take from their $200 million that has already been set aside for "business expenses, buying BTC or whatever," and they use that money to establish their buying on the dip budget down to $3k-ish, So they could authorize themselves to buy $15 million worth of BTC in every $1k increment drops that the BTC price falls starting from $15k, and they would end up having 13 buy orders between $3k and $15k, which would add up to having an additional  26,086 BTC that they would be able to put up for collateral to defend their $3k-ish liquidation peg.

Here's the buying on the dip math that adds up to an additional 26,086 BTC

Buy Price    BTC Buy   BTC Total   $Buy Amt     $Total Spent $15,253.21   983.40    983.40     $15,000,000.00   $15,000,000.00 $14,253.21   1052.39   2035.79   $15,000,000.00   $30,000,000.00 $13,253.21   1131.80   3167.60   $15,000,000.00   $45,000,000.00 $12,253.21   1224.17   4391.76   $15,000,000.00   $60,000,000.00 $11,253.21   1332.95   5724.72   $15,000,000.00   $75,000,000.00 $10,253.21   1462.96   7187.67   $15,000,000.00   $90,000,000.00 $9,253.21   1621.06   8808.73   $15,000,000.00   $105,000,000.00 $8,253.21   1817.47   10626.21   $15,000,000.00   $120,000,000.00 $7,253.21   2068.05   12694.26   $15,000,000.00   $135,000,000.00 $6,253.21   2398.77   15093.03   $15,000,000.00   $150,000,000.00 $5,253.21   2855.40   17948.42   $15,000,000.00   $165,000,000.00 $4,253.21   3526.75   21475.17   $15,000,000.00   $180,000,000.00 $3,253.21   4610.83   26086.00   $15,000,000.00   $195,000,000.00

Regarding your other point about how far the BTC price is likely to fall, it seems we are already at very low historical levels in reference to the 200-week moving average, but sure we have a lot of extreme negative macro factors including various kinds of possible contagion in the way that various shitcoins have been leveraged, and surely something like the ethereum ponzi scheme falling could contribute towards more negative cascading BTC prices.. but still I with you regarding $10k being an extreme that may well not even be met.  There is no guarantee that BTC prices will even get lower than their current low that we have reached so far of $15,632 from over a week ago.  So I am having difficulties giving high odds to BTC prices going lower than they already have or even reaching the kinds of lows that some people fear could happen - while at the same time, someone who is buying on the way down, may well still want to prepare for worse case and/or even outrageous scenarios that may or may not end up playing out.

Technically speaking then they can withstand the bitcoin downfall to considerable low level but to the contrary he will be adding more to the reserve and accumulating more at these levels taking his average price of investment even more down.At this time they might be in loss but our orange bright eyes friend is optimistic about bitcoin future and will keep on investing even more at these times.

But as per the current market trends we can go little bit down to say to $10k also but like 2017-18 period we can't go to $3k level to what he can withstand the pressure so we are not going to that level most probably.

After all, bitcoin isn't going anywhere anytime soon. It will remain, and when governments around the world start allowing major players in their respective markets to accept bitcoin payments, the price is bound to go up.

All correct.
Technically speaking, Microstrategy is safe until BTCUSD@3,000 roughly, as they can keep adding bitcoins from their stash until that level without operating on the market.

I said “technically speaking” as even if we know how much MSTR is a personal possession of Micheal Saylor, he can withstand pressure on his “Bitcoin Plan” in the case our mutual orange friend get to that level.

Yeah.. It may be a little unclear, because there could have been some financial circumstances that were not outlined very specifically by Saylor and/or MSTR regarding the liquidation point of some of MSTR's loans... but it makes sense that MSTR would post more collateral.. because initially when the BTC prices were in the upper $30ks, Saylor was saying no problem because the collateral then posted had MSTR's loan protected all the way down to some price point in the $21ks, and few folks were then thinking that the BTC price would get down into the $21ks - so maybe now the idea was that Saylor/MSTR wanted to make sure that they post additional collateral in order that they are protected down to $13,500 - which seems understandable that they are going to want to continue to add to their collateral in order that their outstanding loans are covered.. while at the same time not necessarily wanting to encumber currently unencumbered BTC by placing it as collateral (which largely means giving keys to some other parties.. and we have recently seen that some other parties have not been very responsible in their holding of the keys of their clients, related to a variety of crypto assets - so not just BTC custodians - and even witnessing some otherwise responsible custodians get caught into situations where they might have lost or absconded with the coins of someone else).

Posting collateral seems a better option than either getting liquidated or having to sell BTC in order to pay off the loan with BTC prices way lower than the price in which the loan had been taken out.

I am sure that the situation is stressful for Saylor and MSTR - but likely not as stressful as some of the seeming exaggerations that come out with assertions of loose facts that are put out as if there is some kind of an inside scoop - and surely the BTC price dropping further than expected is no comfort to MSTR's actual BTC but also the fact that the value of their company (price of their stock) is going down at the same time - so options get removed from the table - while at the same time, I recall a couple of months ago that Saylor/MSTR had gotten approval and announced a line of credit that was in the ballpark of $200 million that it could use for business operations and/or buying bitcoin and/or any reason that it wanted to use such line of credit, and I cannot recall hearing that any of that money having had been used and it seems to me to be likely that the money would still be available.

I don't know how true but I read Microstrategy lost big time in the recent outburst between Binance and FTX.
From what I see they say they are in a big loss of over $1.8 billion dollars, I came across it while scanning down over the internet some few day, I would love to know of same news was read. Since then he hasn't bought any Bitcoin. How bad did the outbreak hit Microstrategy Bitcoin holding's.

Reading various Tweets recently, there is a lot of chatter about Microstrategy having to post additional collateral at the 13,500 USD level, apparently with dire consequences.

Nothing at all.
Microstrategy has enough bitcoins to post as collateral for those loans. This is more than a transaction moving those bitcoins into a segregated wallet. The only consequence is those coins won’t be immediately available for sell. But this is, of course, something Microstrategy is not interested in.

Of course, you are right, nothing can be ruled out in the future, but for now an increase in power is possible only with an increase in energy intensity, although IBM has already introduced a 433 qubit quantum compute and is going to introduce a Condor processor for 1121 qubits next year, and Flamingo for 1386 qubits is also planned for 2024, but for now the use of quantum computers in mining is being considered just as an experiment.

I am sure that these conclusions are based not on facts, but on assumptions, some of which are erroneous.
For example, the statement "...virtual currencies that are issued by the authorities are unstable and doomed to failure, and that Bitcoin is superior to them due to its being tied to a lack of time and energy..." is just the current state of affairs when mining requires a lot of time and electric energy. It cannot be argued that this will continue to happen, for example, I do not exclude the emergence of disproportionately more powerful, in terms of performance, miners that will consume much less energy. As a minimum, this assumption destroys the previous one. And if we talk about technologies, then there are no guarantees that the cryptoalgorithms put into the base of Bitcoin are reliable and really crypto-resistant ....

Maybe it’s too early to call, but this dump meant Microstrategy will have to set a said as impairment a good amount of money:



This 15,500 low meant another 190 millions of Bitcoin impairments.

hahahahahaha

You caught me with my panties down.   

I guess I was speaking loosely.. and for sure in bitcoin we have a lot of symbiotic relationships.. and surely, in sum, bitcoin gives no shits about Saylor or no Saylor.


That's true.  Bitcoin gives no shits about fair or not fair, but coincidentally, bitcoin happens to be designed in such a way that central aspects of society have potential and incentives to "play" in more fair ways because the various unfairnesses of the Cantillon effect of the money printer becomes less and less effective - since "bitcoin no play like dat."


There is some truth in what you say in regards to some bringing back of more basic values from the past - however, at the same time, there are a lot of advantages that is likely going to come to people who are in a position to figure bitcoin out early and to accumulate some of it earlier rather than later...  at least so far that seems to be the projected direction  in terms of advantages to those who both figure it out early and also who take actions in order to attempt to align themselves with investing into bitcoin (i.e. time, energies, money).