I feel like it is almost the opposite by now: the higher the price, the more bitcoin MSTR buys and I think I am not actually wrong about it. The majority of their holdings have been bought +$50,000, isn't that right? Anyone can tell from the top of their head? Or it could be something around 50%, but I remember that the number increased significantly just recently while the price was going through the roof.
It seems to me that if the current average cost per BTC is $58,263, then that would be the number that would be considered to be showing that they are buying a lot of BTC above and below that price.. perhaps an equal amount above and an equal amount below?
My bad, I overlooked that piece of information in the tweet... You are of course right here.
Surely when this thread started, we saw that the first couple of purchases of MSTR and Saylor were in the sub-$10k arena, and then right around $11k, and surely there are some folks who might have thought that keeping average cost per BTC is important, even though surely there is power in quantity of BTC held, even if the average cost per BTC is higher. I have frequently attempted to make those kind of comparisons of guys who might have had made some lump sum BTC purchases, and then just let their investment ride as compared to the guys who continued to buy BTC for several years, and surely there are advantages in having low costs per BTC, but there are also advantages in amassing a decently large stash of BTC.
You have phrased this very well! Power in average cost and power in quantity held and Saylor made a golden formula out of it combining both while seemingly putting more emphasis on quantity held and he does that because he has a goal, which he stated sometime ago saying they aim for 1,000,000 BTC, and he knows that it is still early days, especially from the perspective of a big player like MSTR. If they aim at becoming the bitcoin bank and someone wants to compete with them in order to reap in a piece of the cake, there is no other way but to acquire a competitive quantity of bitcoin themselves. And once this market matures and others crave this gigantic opportunity, MSTR will already be in the driving seat and enjoy other big players driving up the price, thereby making MSTR even stronger.
Quantity held is so powerful because there is nothing as strictly scarce as bitcoin. It is very simple: my holdings / 21,000,000 is my position in the global market once and forever. The denominator will never change. Owning 1/21th of a scarce asset with this particular set of properties is the jackpot.
But do you think there is a sweet spot of owning too much, scaring away others from getting into bitcoin on a large scale (if even possible anymore)? MSTR holding 5,000,000 BTC would perhaps not be as good for the asset as one player holding 1,000,000 BTC.
One interesting angle for Saylor is that his own track record of buying consistently with company funds, but then becoming more and more creative with the employment of various financial instruments, these behaviors have contributed to more and more funds coming to Saylor to help them to buy more and more BTC, so even if the BTC price is going up, there is no real disincentive to stop buying BTC so long as folks are ready willing and/or able to give money for such purpose, including giving that money to Saylor for less than 1% annual interest rates and terms that are tending to be longer than a whole cycle... so it has so far turned out to be a win/win for Saylor/MSTR and shareholders to be able to continue to build the BTC stash of MSTR and even building the BTC stash of the existing shareholders, even though Saylor has the true rights, responsibilities and discretion regarding how to manage such BTC holdings, and as long as everyone continues to profit then it becomes less likely anyone will claim that Saylor has been mismanaging the BTC or the related money that has been growing as well. Also if Saylor/MSTR continues to be quite transparent regarding what they are doing, then it is less likely that any shareholder(s) would be able to make any strong claims that he had tricked them in regards to the strategy that he has been employing... though surely there are Saylor/MSTR haters that might be wanting to find fault and/or to intervene in what he has been doing and plans to continue to do.
I doubt that even if BTC were to take a nosedive like a 30% drop that any considerable number of MSTR investors would jump ship. There is so much cash in the world and other, not very durable assets that I believe billionaires would rather seek to liquidate and use the opportunity to get into MSTR-like vehicles instead of jumping ship and abandon bitcoin. Saylor has created a self-enforcing machinery, but as I said, is there a sweet spot and will he stop at 1,000,000 BTC and build his bitcoin bank? Remains to be seen, but so far he has been the one who has been doing what I thought a company like Blackrock would be doing because they could have easily afforded it.
