Topic: MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 20. (Read 18747 times)

They are back buying for collateral repayments after last selling in December 2022.
This company always surprises people with many plans after plans.
MicroStrategy's next plan is to use the Lightning Network service as a content monetization solution.

https://bitcoinmagazine.com/business/microstrategy-purchases-6455-btc-pays-off-205m-loan

Yeah.. but we are not really talking so much about "cryptocurrency" custody here, even though some of the various systems are overlapping, we are talking about a company that invests in bitcoin.. and has been attempting to use various mainstream traditional financial/banking services, including hedging debt and various other ways that Saylor/MSTR seems to have tried to be creative in their use of various kinds of debt and leveraging systems, and they never touched any shitcoins, even though some of the banking services that they were using were exposed to shitcoins, and also surely the price of bitcoin has been increasingly affected by various shitcoin projects that either claim to have bitcoin that they do not have (such as FTX as one pretty BIG recent example) and also sometimes engage in practices that claim to collateralize BTC or algorithmically attach or stablize to bitcoin in such a way that they also likely do not even have enough bitcoin to cover the claims that are outstanding in regards to their algorithmically created pegs (referring to the TerraLuna fiasco).

Nonetheless the central point here does not seem to deal with the custody of cryptocurrencies, or shitcoins..  we are specifically talking about bitcoin in regards to what Saylor/MSTR is striving to hold or to employ custodians that hold some or all of it.


I also have some trouble with this framing, since we have crazy ass rising levels of dollar debt and dollar instruments, and we have various kinds of scams in various spaces, including some of the fake ponzi schemes in which people try to make money, and sure there is some likelihood that some people end up fleeing to bitcoin because they see so many risks in the other sectors including how third-party exposures are seeming to be problematic.. and then also more recently seeming regulatory attacks on third party services that also have bitcoin branches... and also historically, bitcoin has not really been seen as a risk-free asset, even though a lot of longer term bitcoiners had been viewing bitcoin's investment thesis to be strengthened by it having fewer third -party risks, and it seems that more and more people are becoming enlightened to bitcoin as a potential safehaven.... but then at the same time, bitcoin is very liquid so sometimes it can be pumped or dumped pretty easily compared to other kinds of assets that someone might hold... Some of these aspects are moving targets too, including perceptions of risk and even liquidity options.


I think that is part of the dilemma that I am presenting too, yet I have my doubts that the offering of custodians is shrinking because it seems that more and more bitcoin custodian services are becoming available, even though some of the services that deal with bitcoin are being attacked at the same time, yet whether they have been or continue to be good custodians may well be questioned.. and surely there could be a lot of vulnerabilities to rely too much on any one custodial service... and surely, this could be a bit of an unknown for individuals who might be able to more easily self-custody, but frequently institutions, companies and even governments might not be able to self-custody... so MSTR and even El Salvador likely run into some of custodial issues, but they are not seeming to disclose too many details regarding how they are employing their BTC custody.. which I don't completely blame them for holding back some of their custodial details, but at the same time, when a bunch of shit is hitting the fan many folks become worried about whether the coins of some entities or individuals might have exposure to some of the ways that the shit is hitting the fan.


Yeah, but we are still seeing that banks are not all created equally, and there might have been some banks that were more exposed to certain industries, and the banks may have had differing ways of holding their value including that bigger banks may have been more able to weather some of the storm, even though some of the storm might be based in reality or merely perceptions of reality because if push comes to shove, if there is a bank run on any bank, they might not be sufficiently solvent to handle it, so there could be some aspects that relate to how much exposure a bank might have to certain industries, but there also might be some market and/or governmental manipulations going on too, including the fact that the US Fed Govt had announced a new Fed Now program that is supposed to start in early July, while they are beating up upon the rails of systems that Silvergate and Signature bank had put into place that allowed for the 24/7 movement of dollars.. which would also help to bring greater liquidity to bitcoin and to crypto trading. .. since the bitcoin and crypto trading has tended to be 24/7 for the past 13 years or so (and of course avenues of bitcoin and "crypto" liquidity growing during the last 13 years or so, too).


I don't really disagree with anything that you are saying in this last part of your post slapper, even though I am way less concerned about whatever is happening with "cryptocurrencies" than you seem to be, and I think that if we are framing these questions in terms of what is happening with "cryptocurrencies" then we are losing some of our own understanding regarding the foundation of how any of this space has value, and sure there are a lot of folks fucking around with shitcoins.. but still I had not framed any of my questions regarding the possible dilemmas of MSTR and Saylor in terms of what is happening in "cryptocurrencies" because I give little shits.. but if we at least frame the matter in terms of what is happening in bitcoin, then surely we can still understand that some of the things that are happening with various shitcoins and scams also end up touching upon bitcoin and even perceptions of bitcoin, but still, from my perspective, it does not seem to be very helpful for any of us to be repeating the same convolution of terms fallacy and we need to be using the word bitcoin if we are talking about bitcoin and make sure that we are staying focused on what we are talking about because the tail does not wag the dog... so when we talk about the tail (which are shitcoins) then we sometimes lose our perspective of what is happening with the dog (which is bitcoin) and I was trying to talk about the dog here, not the tail... and surely not trying to go along with any kind of framework that tries to give agency to the tail in terms of having any kind of special place of equivalency as compared to bitcoin.. so let's try to focus a wee bit moar better, if that's still possible?  

And, from your forum registration date slapper, you have been around here for the same amount of time as me, so really you should know better, no?  or maybe you still have not figured out what is bitcoin and how it is different from "crypto" and how that dumbass framing of matters in terms of concerns about what is going on with "crypto" is losing the plot and also convoluting and confusing matters.

The perplexing world of cryptocurrency custody is absolutely enthralling, folks. Bitcoin's skyrocketing value is raising the stakes and risks like never before! We've got serious issues with these custodians; people are questioning their security and truthfulness. It's like trying to find a needle in a haystack, but we need to make sure we've got the right protection in place.

Banks have their own ways of holding dollars, and with reserve requirements changing, we're looking at a liquidity crisis! Interest rates keep bouncing around, making it tough for custodians to lock in value – it's just like a rollercoaster. But Bitcoin is a whole new ball game, and it's not playing by the same rules as traditional currencies.

Custodians need a wake-up call, especially as they're holding more coins. Coinbase's recent legal troubles are shining a light on the gray areas of compliance. We've got to hold these custodians accountable for their assets, and they can't play games with rehypothecation. Microstrategy's early Silvergate loan repayment and reevaluating their leverage options is moving in the right direction. We need to make sure these third-party entities can give back collateral when push comes to shove. Cryptocurrencies are a thrilling ride, but we've got to keep questioning and improving custody practices to keep them safe and genuine.

In recent days, I have been thinking about some of these related matters too, and surely it remains unclear to me how MSTR is custodying its various coins, and surely there might not be any exact need to provide all of the custodial details, because that could lead to some insecurities of the coins... and their processes for securing their coins.  However, at the same time, when we have recently witnessed so many problems and issues with various custodians, there can be questions regarding whether they are actually holding what they claim to be holding, and surely the dollar and banking system has a variety of requirements in regards to what it can and cannot do with dollars, and we know that right around the earlier parts of the covid related liquidity issues, they were allowed to go from being required to hold 10% reserves to 0% reserve requirements, which might have contributed to make matters worse in regards to their not having sufficient reserves, but also there seem to have been problems with the sudden changes in the interest rates contributing more to the problems of how they were holding their some of their value in time-locked ways that were earning lower interest rates than the current rate - but still bitcoin is a different kind of an asset, even though if there may be ways in which loans were being taken out on it, then the custodians of the dollars may have ended up being responsible for overseeing or even taking into custody the bitcoins that were the loan collateral, which apparently was not the case with the way that MSTR had structured one of their loan relations with Silvergate.

Of course, there are some bitcoin entities such as Coinbase that are being brought up on charges for some of its various non-bitcoin products, and sometimes there could be some ambiguities in regards to how a company might be compliant with one aspect of the law and not compliant with other aspects, and of course, sometimes we have found out that the entities are not holding the assets that they claim to be holding - or they might have some abilities to not hold the items that they are claiming to hold because they might be allowed "by law" to further rehypothicate (or put the assets to work). 

Perhaps the more coins that any entity has, then the more ways that they might be custodian their coins and the more ways that some of their coins could come vulnerable to the short-comings, missteps or even foul play of other parties - whether directly or indirectly - and surely US government entities, representatives and even financial institutions have not been putting out "friendly" gestures in recent times, including that sometimes they seem to convolute some of their ideas to distinguish between various kinds of assets and/or currencies that currently exist - and I am not even completely blaming anyone for some of the confusion, even though surely some of the confusion likely is being shown as purposeful hostility and/or even wrong kinds of blaming... not that we always live in a just world either when thieves are involved (and it is not even clear sometimes who the thieves are).

I am thinking that some of the recent happenings has gotten Saylor and MSTR to rethink some of its custodial practices, and maybe even engaging in some reconsiderations regarding how to go forward with various kinds of custodial matters, including how it might enter into some relations with traditional banks - including that their decision to pay back early their $205 million loan with Silvergate ended up being a change in plans but also could cause them to reconsider whether and how to employ similar kinds of leveraging possibilities in the future, even though this one may have had worked out better to be able to buy back their loan with a 22% discount... many times normies are not able to get into those kinds of relationships, but even big players can sometimes also end up getting screwed over when third parties might not be in a position to actually be able to return the goods that they were holding as collateral... or sometimes even bankruptcy proceedings can sometimes tie up the abilities of third party entities to enter into settlement agreements that involve assets/debts that they might hold.

Microstrategy is back at buying bitcoin.



More importantly, they bought back their debt from Silvergate, putting any speculation about the potential effect of this to rest.

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Edit: thank you Ratimov for an effective report of this news.
 My reflexes are slower and slower.

Micheal Saylor never advices on trying to time the market and buy the dips, yet he advocated long investment horizons, 4 year minimums and DCA approach to entry point.
In this perspective, and having in mind the Microstrategy buying strategy, the “buy the dip” approach makes little or not sense at all.
I think I igsce stated the above various times here on the thread, but regularly we turn back discussing.
Buying the dip is necessary if you have a trading approach to bitcoin, with a short investment time. MS instead always talked about investment approach, with a 4 year time horizon. In this context the price oscillation greatly fade away.

With those examples, you are not really bolstering what fillippone had said ginsan.  Sure there might be some convenience for Saylor to buy a bit more on the dips, and perhaps Saylor might be regretting that he had never really been motivated by buying on the dip as a serious consideration, yet ongoingly people are trying to assign those kinds of " buying on dips" motivations to Saylor and there still is hardly any evidence that Saylor gives too many ratt's asses about trying to time dips.. or figure out how much of a dip is a dip, and in some sense, for Saylor any BTC price is likely a good bargain - once he and his Company is able to clear such authorizations to buy.... .. based on the various kinds of considerations that fillippone already outlined - including is cash available through cashflow considerations or ability to dip into various sources of cash that might allow him to buy more BTC..

I think with anyone, when the price of what you bought had gone down (including something like BTC), you can retroactively look back and say that you could have waited to buy in order that you would have been able to get more at the current price rather than the higher price that you had paid, so in that regard, Saylor had been showing some of those kinds of appearance of potential regret, but at the same time, he still does not seem to be centrally motivated by that - in spite of the ongoing imposition of those ideas on him.

most likely as you said where large funding will be more flexible for Saylor or MS to increase their btc holdings at the bottom price or below the average entry price that they do.

I also found several people on social media asking the same thing 


source : https://twitter.com/Bitcoinfinity/status/1637339281579720706?t=hkqJmBB-SHPx36wA2isMHw&s=19

but one thing I can say to Saylor, most likely he will wait for the average entry price that they did to be reached this year and even this month because they/Saylor were at minus 50% at the end of last year it would be more efficient to get funding latest or he again has the option to take out more loans to buy btc because he is that type of person.

Michael Saylor, a well-known Bitcoin advocate, is more likely to be driven by funding issues than trying to time the market. This could mean that his purchases are influenced by factors such as cash flow from operations, equity or debt processing.

What motivates Saylor's buying patterns, as there could be a variety of factors at play. But what I love is that he has been an outspoken supporter of Bitcoin and openly expresses his belief in its long-term value by expressing positive sentiment to buy more Bitcoin.

I'll admit that Michael J. Saylor is one of the most optimistic bitcoin investors so far. He can invest in bitcoin when the price is low, he can also buy at a higher price. I must have been really happy when he never wanted to sell his bitcoin, and so far Michael J. Saylor is a very different investor from Elon Musk.

Michael J. Saylor could raise himself as a red flag for the bitcoin market if he wants to sell some of his bitcoin in the future. Many people are wary of him because of his high bitcoin holding.

It never seemed to me that he was looking for a good time to buy, although it seems to me that he would have been very happy if he could have invested a lot more money while the price was under $20k. Of course, his company already has a very nice amount of BTC, and when you have that in mind, it's easy to plan your next move. Be that as it may, even though Saylor remained optimistic even when it looked like the price was going to go towards $10k, I'm sure it's a lot easier for him today than it was a few months ago.

I strongly doubt that Micheal Saylor is trying to time the market. I guess his buying pattern is more dictated by funding issues (be cash flows from operations, equity or debt proceedings).
Anyway, I like it. It’s time to buy some more.

btc touched $28k today. the entry point that microstrategy makes in the average buy is in the $30k range so this is a beautiful period in the shadows that I feel in saylor mind. i think btc will touch $30k in the near future. quite a quick reversal considering that in the previous month btc touched $15k or its lowest point since touching ATH $69k.

well for this year Q1 may be ending soon, is there any rumor that Saylor will buy the first btc of the year or he will skip Q1 to buy btc within this year. the last time microstrategy bought btc was on 24/12 and this has been the last purchase or they are waiting for the right moment to make an entry

In my opinion, if we pay attention to the discount on the market price of Microstrategy's stock, I think it has a cause and effect as well where the level of market concern related to regulatory issues or security breaches can contribute to the price of Microstrategy's shares.

In the OP you can find a link to a spreadsheet.
There you can find this:



Each share of Microstrategy is worth 267.66 USD, while the Bitcoin they hold are worth 320.98 USD.
This is a hefty 20% discount.

Probably the reasons are the market is discounting some hassle related either from Sivlergate distress or rather a difficulty for Microstrategy to go on with their Bitcoin Strategy due to more adverse banking system.

I don't know, but it's a good trade to jump on.

For sure, I am not claiming to have any specific knowledge - and the latest that I had heard was that a decent amount of MSTR's loans were held at Silvergate, even with a claim that the collateral for such loans was not held at Silvergate - but I had not seen any meaningful clarification regarding the safety of that collateral.

Personally, I hardly see any reason to worry about if there might be aspects of uncertainties if a loan (or payments) might start to come due in 4-5 years - and there had already been statements from Saylor that there was not any risk (did he overstate the legality of the matter) that payments (or even the whole loans) would end up getting triggered to have to be paid earlier than their agreed upon date (4-5 years from now), and for sure if the collateral were actually at risk (and it was not believed that the collateral was actually safely held - if specifics are not provided in regards to how it is held (or by whom)) then any kinds of uncertainties, whether real or imagined could lead to price disparities (or diminution) in regards to MSTR's current market share prices.

I know that I am not really providing any answers, but I don't claim to have any answer - except maybe I have some similar questions regarding the security of any coins held by MSTR - including coins held in collateral (and by whom?  is there a need to know?).. I personally have fewer worries about any of their outstanding loans getting called (become due) early - and I suppose I had been reassured by Saylor's statement (or was it a tweet?) in that direction... not that I am an investor in MSTR.. but surely there has been nearly persistent and building MSTR FUD which sometimes can have short-term effect on BTC prices (or sentiments).

Anyone knows the reason the $MSTR price is suddenly severely lacking the value of the number of bitcoin per share?

I have seen this news and there seems to be no confusion regarding the rumored proximity of microstrategy to Sivergate capital. Well their bankruptcy has occurred in the last 3 months as published by https://www.linkedin.com/feed/update/urn:li:share:7038920782495793152 assuming a loss of $1 billion. some new rumors, it seems that some of sivergate capital's top shareholders will inject fresh funds to help it out of the liquidity crunch.
https://twitter.com/qsjy9898/status/1632616756991885312?t=UzO5eYmL7owq8XGBWMkSew&s=19

with this incident there is a little explanation from Saylor which was broadcast by SQUAWK https://twitter.com/BNBTCCRYPTO/status/1631429221737168898?t=YAhuUOqtxDIYJ1Ok15RLnA&s=19

And as a consequence, Silvergate Bank announced the termination of its own payment network SEN (Silvergate Exchange Network), such an announcement can now be seen at the top of the home page of their website. SEN was used in particular Binance.US , Kraken and Gemini.

https://www.silvergate.com/

A lot of chatter on Twitter about the close relationship between Microstrategy and Silvergate.

MicroStrategy Says It Doesn’t Have Any Assets Custodied With Silvergate



The Microstrategy loans is an asset to Silvergate Capital. This asset can be sold to other counterpart, so that proceeds can be used to satisfy Silvergate creditors.
This asset sale doesn't mean absolutely nothing for Microstrategy, hose collateral is not at risk of being liquidated.