Topic: MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 42. (Read 20809 times)

MicroStrategy CEO Michael Saylor expressed his opinion about bitcoin's prospects for growth and how he believes it is that bitcoin will grow forever, while maintaining volatility risks.
 Michael Saylor also stated that MicroStrategy will continue to buy cryptocurrency based on market conditions. "I think within a decade bitcoin will be the strongest, most complex and technically promising store of value in the economy," he said.
 MicroStrategy is open to using debt or equity to fund its growing bitcoin holdings CEO Michael Saylor said. Saylor thinks that stablecoin will reach a market capitalization of $10 trillion if regulators provide a transparent structure around it.
https://seekingalpha.com/news/3761719-microstrategy-ceo-bitcoin-is-going-up-forever

Microstrategy released they last 2021 Q3 Earning call.

MicroStrategy Announces Third Quarter 2021 Financial Results

Regarding Digital Assets, they stated:


Those impairment losses are hard to calculate.
Accoring to their first Earning Report with Digital Assets:

         
               
Basically, each Bitcoin is valued at the minimum price since their buying.
Impressive!


               
               
               
               

I am not sure about what the point would be to discuss whether someone, some entity or some country is a "good candidate" to get into bitcoin or not because it is not like we have any kind of choice.

Either they get in or they don't, and that is the choice of each of the entities, so even if we say that they are a good candidate or not, it is not like we can stop them from doing what they want... so why get worked up about it?



Each entity whether we are talking about Microstrategy or some other kind of company or a country is going to make different decisions regarding how to secure their bitcoin depending on how much they have and how decisions about managing finances are made.  Of course, individuals and closely held companies are going to have more options than BIGGER institutions, or more diversely held companies or governments might have custodial and reporting requirements that individuals do not have.

I may be wrong and Saylor knows something we don't, but if we look at Turkey from the perspective of human rights and freedoms, their foreign policy, and various other factors - I'd say they're not a good candidate for a country to buy Bitcoin into its monetary reserves.

Of course, all of the above does not have to be a decisive decision when it comes to a country's financial policy, but unlike Saylor who is arguably one of the biggest believers in Bitcoin, he represents his company in which he has absolute supremacy - and on the other hand, any country that would officially invest in Bitcoin would have not only a possible financial loss but also political responsibility in case of failure. I'm not just talking about price here, it's also about security risk - because it's one thing to invest in Bitcoin and quite another to keep it safe and secure.

You seem to be implying that betting on bitcoin would be an all or nothing proposition, and even if Saylor went balls to the wall in on bitcoin, he does not even seem to be suggesting the same for others, whether we are talking companies, individuals or countries.

In other other words The Pharmacist, you seem to be suggesting that countries need to apportion their risks appropriately... in other words, countries, companies and individuals should be considering the bitcoin investment matter in similar ways and get the fuck in... earlier rather than later.. earlier rather than waiting ..

Sure, there are questions about how much to invest into bitcoin, but there should not be questions about not investing.  

The risky investment is staying in dollars (or dollar denominated investments).. actually staying in dollars is not a risk because you know  yes.. you actually know.. that you are going to lose money for sure.. 100%.. so the only way to preserve some of your wealth is to invest into something other than the dollar, and bitcoin seems to be a very good candidate.. even with 1% to 10% of your investible assets.. if you are more risk averse, as you, The Pharmacist, seem to be suggesting that countries should be, then you invest at the lower end of the 1% to 10% range rather than the higher end of the range.. being risk averse does not mean NOT investing.. so there you have it..

If you want to have fun staying poor, then probably the best move is to NOT invest into bitcoin at all (and a lot of countries, companies and individuals are still on zero when it comes to bitcoin), especially while we are in the midst of what seems to be the greatest wealth transfer in history.. which also involves bitcoin as the center piece to this current and ongoing dynamic wealth transfer dynamic.,. whether you merely want to look at ONLY the downside potential of such.. which is a blinded way of thinking about the whole matter..

This should not be "all or nothing" thinking, but instead making appropriate, adequate and meaningful investments/allocations and get the fuck off of zero wether you are an individual, a company or a country or some other entity that needs to consider wealth preservation and investing in these seemingly trying times.

Oh, man....I don't know if Saylor's idea is a good one, even if he and his company have made a killing since investing in bitcoin.  He's basically saying that a country's bitcoin investment could be multiplied by 10 in 5 year's time, and while that could be true, we all know how volatile it is and, if we're being honest with ourselves, we don't know what the future of bitcoin is going to be. 

Gold has maintained a fairly stable price over the years, whereas bitcoin has only existed since 2009 and it's not unheard of to drop in valuation by 50% or more in a very short time period.  I just don't think it'd be wise for governments to invest heavily in it.  Saylor is saying (without actually using the words) that countries should engage in currency speculation because they stand to make massive profits--but these are governments we're talking about!  The money they have is used for all types of public goods and services, and many countries just can't afford to gamble (there, I said it) on a cryptocurrency that's notorious for its stomach-wrenching price swings.

I would not consider that a country being "hostile" to bitcoin as a matter of excluding them from coming around to "see the light" regarding bitcoin as an investment thesis.

Surely there are problems if governments or government officials are perceived as corrupt and they are planning to bring in bitcoin in order to make money for themselves and to screw the people.  I do not consider governments to be corrupt if they are wanting to make money in order to benefit the people.. and maybe even to build political points for themselves.. but if they are going to be very corrupt in terms of actually stealing public money.. that would be a problematic area that surely can be present in some governments and some cultures in which they might have greater tendencies to use political vehicles to steal value from the people. 

Another way of saying it might be that I am not bothered by a little bit of stealing because I am not anti-government, but there are some kinds of going way overboard that some personalities gravitate too much towards corruption and robbing the people.

Bringing it back to bitcoin, there are a variety of ways that countries could start to bring bitcoin into their systems and into their treasuries, as Saylor was asserting, that could end up being valuable to their countries and their people and likely even to themselves as politicians - so the overall idea is surely not bad - even though the way the matters play out can vary quite a bit based on how any poor governments might end up attempting to play the bitcoin card (if they were to go down such a path).

By the way, at the time of this post, I have not yet looked at the BCT (Fillippone) thread that you linked above.. I intend to go through that thread in the coming days (or when I get a chance.. maybe it will change my mind about some points that I made?  not sure.).

It seems to me that Saylor was completely wrong in choosing Turkey as an example of a country that should invest in Bitcoin, and here I am thinking primarily of the official attitude of that country towards cryptocurrencies in general. I remember that about half a year ago they banned the use of cryptocurrencies in the sense that you can't pay with them -> Turkish Central Bank Forbids use of cryptocurrencies as a mean of Exchange.

I personally don’t see Turkey as a serious candidate to make one such move, but politicians love money, maybe if someone put a bug in their ear, who knows, maybe.

I don’t know if the example is on purpose or not, but actually Turkey has been a constant buyer of gold reserves during the last months. They could easily switch their initiative to digital gold!

First of all, I want to thank you for correcting my wrong opinion @Jayjuangee and @Fillippone and without being supported by good data. After looking at the data presented by @Jaysabi, I just realized that there has been a continuous decline in revenue even if we graph the lowest decline in 2019. In terms of productivity, this means that 2019 is the lowest point MSTR generates revenue for the products/services they offer to the public. . Then when compared to Net Income which continues to increase, this increase must have a reason because if I only have that data, I am a little hesitant to conclude. I don't understand how to access MSTR's financial statements for free. Can someone tell me here? If based on the data, I think why the net income in 2020 is the lowest it could be because of the rising costs and if it is said that the net income is minus due to the purchase of BTC then the purchase or investment decision in their financial statement will be clearly stated.

It is nice to see the numbers juxtaposed to each other.  I am a bit bothered by the way you characterize Saylor's getting into bitcoin as if it were some kind of desperate move - and really even if you are not completely inaccurate, the framing seems a bit dismissive of nuance.

Even Saylor has said several times that his position has evolved and he has gotten more and more bullish about bitcoin.  In other words, he first came into bitcoin with a kind of defensive position not to lose value and he was learning along the way, and the longer he was in bitcoin the more and more bullish that he became about bitcoin. 

Surely, to outsiders and no coiners, Saylor probably appeared as overly zealous bull right from the start, but I personally have no doubt to accept his representations that he became more and more bullish (and aggressive in the way that he invested into bitcoin) with the passage of time. 

A very interesting panel with Micheal Saylor and MSTG CFO about their decision to invest in bitcoin:




As we were discussing profitability of MicroStrategy, of course we have an elephant in the room here. But also, who remember that Berkshire Hathaway was a textile company after all?

Against the background of the rise in the price of bitcoin, MicroStrategy doubled its funds invested in bitcoin, to be more precise, they increased 2.2 times when the BTC price reached $ 60,000.

MSTR was profitable but revenues were declining prior to getting into bitcoin.  While it certainly not healthy to have declining revenues for multiple years in a row, I wouldn't categorize them as being so bad that they were "dying."  But they certainly weren't on the up and up, however severely you want to categorize that.

FY         Revenue (thousands)     Net Income (thousands)
2017      504,543                        17,643
2018      497,638                        22,501
2019      486,327                        34,355
2020      480,735                        -7,524

Over the four years prior to bitcoin, revenue dropped just under 5% but was dropping slowly and consistently.  They definitely needed something to make them relevant, and Saylor very keenly recognized bitcoin was it.

No, the rule by FASB affects all companies that issue public accounting reports as part of a regulatory regime and has to abide by FASB rules.  The rule, called ASU 2016-01, was implemented in 2016 and went into effect in 2018.  From the rule release, they address who is affected up front:



It's not limited to "financial" companies by any stretch, as you can see it was written so broadly as to involve literally every company that "[has] financial assets or owe financial liabilities."

And yeah, reporting unrealized gains in your company's cash flow makes your cash flow metric meaningless for obvious reasons because it includes gains and losses as "net income" for assets you haven't sold.  It's kind of a big stupid deal if you ask me.  For what it's worth, Warren Buffet agrees, writing to shareholders in a 2017 letter:

MicroStrategy today announced that MicroStrategy Cloud for the government has received the designation "in the process" of the Federal Risk and Authorization Management Program (FedRAMP). Full authorization and certification under FedRAMP is expected before September 2022. "Our fully managed cloud service is the first fully containerized business intelligence and analytics solution awaiting FedRAMP certification, and we are pleased that our federal customers will soon be able to take advantage of it," said Rick Nelson, Senior Vice President, Government for MicroStrategy.

The MicroStrategy Cloud platform is built on a reusable object oriented semantic layer designed from the ground up to meet the most complex and high-performance data security and privacy requirements.

https://www.microstrategy.com/en/investor-relations/press/microstrategy-deepens-commitment-to-us-federal-sector-with-the-fedramp-in-process-designation

MicroStrategy is employing the same dollar cost average strategy, just on an obviously much larger scale.  They convert excess cash to bitcoin on a regular basis, and then have done pretty frequent offering of stock or bonds to raise big chunks of cash to also use to buy bitcoin.  As far as their end-game, they say they're using bitcoin as a treasury asset, which implies not holding indefinitely, as excess balance sheet assets are traditionally used to grow the business or paid out to stockholders in the form of dividends or stock buy backs.  MicroStrategy continues not to fit the traditional mold though.  I would expect that if bitcoin stopped appreciating in value for a prolonged period of time, this would factor greatly into their future plans.  But as long as it slowly pushes new highs and the business doesn't need cash to grow, there's no immediate reason to sell.

It's for when people are trying to put politics into bitcoin, and bitcoin (aka king daddy, honey badger, lillie fiend, etc) gives no shits about your politics.

Go figure?


Hopefully, it does not get too popular because it seems to be a distraction.

 

My own little contribution to bitcointalk.  dastardleek I want my royalties if this blunder gets popular as hodl

"marximalist"? Is that a new term I missed?

If not, can it be a new term, please?