Topic: MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 51. (Read 14269 times)

Pump and dump can still be part of adoption, and if the demands on bitcoin is greater than the selling pressure, then who gives any shits if some BIG wigs believe that they are getting ahead by selling all of their bitcoin when they end up getting left behind because they sell too much too early and then they have to FOMO buy back into BTC if they want to regain their position.

In other words, there is no clear answer that pump and dumpers are always negative on bitcoin's overall price dynamics, even in 2017, there were a whole lot of folks who speculated that BTC was only going within a $3k to $5k price arena, so a lot of folks dumped their bitcoin in that range or even before that range out of anticipation of front-running.. but then some of them may have ended up getting screwed out of their bitcoin because the BTC price went 4x to 6x higher than their highest of expectations and even the ones who might have wanted to sit out the volatility might not have even been able to get back in below $3k like they were hoping on the severe dip... so it is not always so clear that pumper/dumpers come out ahead in the long run if they don't play their cards right... and really nothing to say that this time is going to be any different with many folks selling too much too soon again.. even while nothing is guaranteed, either way.

Of course, the calculation regarding whether to spend your bitcoins will be different for people in differing places and whether they have other options available to them.

My recollection of the Lazlo pizzas example is that Lazlo was one of the earliest of GPU miners, and perhaps he felt a bit guilty regarding the mining advantage that he had in terms of generating so many bitcoins while they hardly had any actual monetary value at the time, so I am NOT very tied into the sob stories regarding folks who spent too many bitcoins too soon because they could have been worth 1,000x more valuable down the road.

In that regard, we choose our payment mechanism based on what kinds of payments we have available to us, and if we can easily replace whatever bitcoins that we spend, then we might have a greater incentive to spend the bitcoins because it is not really much of a difference regarding what payment form that we choose.

However, the longer that bitcoin has had a monetary value, and even the fact that some companies might even be placing extra KYC/AML costs on people to acquire bitcoins, and governments might be becoming more stringent in terms of requiring an accounting for tax purposes or whatever, then greater disincentives will also be created for spending, and why not just spend my credit card and earn bonus points, or spend one of my other cryptos that are not as likely to retain value... which are Gresham Law type incentives.

We also cannot really know exactly whether bitcoin is going to compete some other payment processors out of existence - or what payment processor options that we might have available, including if some of the payment processors might attempt to attract customers by gaining credibility by linking themselves to bitcoin in one way or another.. .but there is likely a lot of development and passage of time that needs to take place before speculating too much about if we might be more inclined to spend our bitcoins based on whether we have other spending options and if we were to assume that there are no other spending options, except bitcoin because bitcoin has competed away all of the other lesser forms of money, we still could consider how we would spend our bitcoin for some seemingly basic needs like housing, utilities, food, transportation because if we only have bitcoin as a payment option, we still would likely choose to spend our bitcoin on those basic living needs, but we might become a bit more selective whether we might want to consume right away or to delay gratification if we were faced with decisions about whether to consume some luxury/more discretionary items, such as hookers, lambos and blow, depending on how many bitcoins that we have and where we are at in our lives in terms of earning power (or bitcoin cashflow), too.

Wary yes; fat fingers thumbo*

They ain't contributing to the network; I don't see them mining; just PnD. Declare that u r buying to pump it and then dum when u see sufficient pump. Adoption isn't PnD.

Very aptly put. The versatility of Bitcoin is one of the factors that gives it value as it appeals to several classes of people. This coupled with its other advantages may actually limit its use in the long term as a means of making daily payments. Why spend my $100 worth of bitcoin on a bicycle when those bitcoins could be worth $121 by the next day? People still ask if the 10,000BTC for 2 pizzas guy still regrets it, well spending 0.002BTC for 2 pizzas would likely be ridiculous a decade from now.
Merchants may eventually switch from payment processors when they recognize this huge value potential as you said, but would more people be willing to give away bitcoins.

Is it even possible for a corporation to take a decision that would allow them to keep their reserve in any other asset, i do not think so it is possible, if it is a small private firm it might be possible as the individual can take the decision but that is not possible with a corporation as you need the permission of the board members to make those decisions and it is not that easy to convince everyone.

With MicroStrategy one person (Michael J Saylor ) is holding the Chairman, President and CEO position and hence he can take his decisions about his reserve holdings.

One thing professional finance people certainly aren't is sentimental when there's money in the air so the gradual acceptance that this thing might have actual legs on their part is going to be a monstrously powerful development.

That's an interesting find.  And yeah, it's a smart U-turn and it's kind of cool that he's had his eyes on bitcoin for that long.  That makes me think he probably knows what he's doing.

MSTR's stock is up 1.26% as I write this, so it doesn't look like this huge bitcoin purchase triggered a shareholder revolt or anything of the like. 

Well, companies usually keep some sort of cash reserve if they're able to.  I don't see any problem with a corporation deciding to keep that reserve in the form of bitcoin instead of USD or some other cash equivalent.  Nor do I see any threat to bitcoin's future as a currency by MSTR's actions.

Largely, I agree with you thecodebear in terms of bitcoin users figuring out whether bitcoin provides some kind of use case for them and then, if it does, then using bitcoin in the way that they believe is suitable to their needs.  If bitcoin does not provide certain use cases for certain "would be users" that they would like to have in bitcoin, then surely they can attempt to get those kinds of features or use cases added to bitcoin, but in the end, bitcoin is not going to give any shits, if someone wishes that they could use bitcoin to buy a latte and not pay any fees for that transaction.. and do it with zero confirmations and to have their transactions immediate.

Of course, in accordance with Gresham's law, most people are going to use whatever payment processing service that is either the least valuable in terms of holding value or the least costly to use, and maybe some day, BTC will supplant a bunch of the currently existing payment processors too because value will likely continue to gravitate into BTC.. but seems more likely that a variety of payment processors are going to continue to exist for some time, and perhaps payment processing on bitcoin or pegged to bitcoin is going to happen on some kind of second or third or fourth layer rather than directly on the BTC blockchain.. even though right now, some transactions can go for relatively low fees, that might not always be the case.. absent some surprise developments that push bitcoin to change in the on-chain payment processing direction.

Surely, bitcoin provides a powerful option that was not available earlier (before bitcoin was invented and implemented), in terms of a sound money that is kind of similar to gold, but better than gold in almost all ways (except the physical tangibility aspect of gold - which is also a cost of gold), and recognizing that bitcoin is better than gold in almost all money ways seems to be a better way of thinking about what bitcoin currently is and what bitcoin has to offer in terms of bitcoin being more scarce, more portable, more divisible, more verifiable, and just something that is capable of being individually held and managed, either without a third party or just way less expensive to manage in terms of either how to hold, how to manage or not having to get permission regarding sending or receiving it... which give powerful options to bitcoin in and of themselves, even if I have not described all of the possibilities that a better kind of Gold has, with the passage of time, it seems quite likely that more and more people are going to recognize a variety of use cases around bitcoin which will continue to cause value to gravitate towards and into bitcoin, which likely was part of the incentive that Microstrategy had in terms of their decision to take a decently-sized stake in bitcoin at supra $10k prices (seems to have been around $11,653-ish per BTC that they would have paid).

There is no "this is what bitcoin should be". Bitcoin is what it is. If someone wants to spend it, they can spend it. If someone wants to use it for sending money across borders, they can do that. If someone wants to trade it, they can trade it. If someone wants to hold it as a long term investment, they can do that. Hell, if someone wants to use Bitcoin in Ethereum smart contracts for DeFi or whatever they can tie it up in that, and that's fine. All of these things are fine to do. There is no one right way to use bitcoin. And all uses add to Bitcoin's relevancy in society and its adoption, so they are all good.

Good for that company. This will no doubt pay off handsomely for them. Any company or organization brave/smart enough to get into Bitcoin will be extremely well rewarded for it.

I believe Harvard and Yale bought up several hundred million dollars of Bitcoin back in 2018, so add MicroStrategy to the list of big organizations that have hundreds of millions of dollars of Bitcoin as an investment. I wonder if there are any more. In another 5 or 10 years that list will hopefully grow to dozens.

There are too many big trusts one the market already. They can control the market, isn't it?

^^ These guys are a publicly listed company so they need to be as transparent as possible.
Or else their investors would get their pitchforks out in protest if they sniff even one bit of shady dealing with any of their forecasts for the future of their assets.
Biggest intelligence firm in the world?
Well if they have the brains then BTC is a safe bet to gamble on if its just going to end up as successful as online gambling.

Nice U-turn, Micheal:


https://twitter.com/michael_saylor/status/413478389329428480



https://twitter.com/michael_saylor/status/1293141856700768257

From declaring Bitcoin a doomed asset to embracing it buying the 0.1% or the total supply. Better than being stubbornly wrong.

Wary you mean? The bitcoin network actually needs companies like MicroStrategy and even bigger ones to join the network, I don't see any cons in it, it appreciates adoption and encourages other establishments to also come in. Btc's purpose btw isn't to survive as a currency, and I don't think it matters at all what people or establishments do with btc when they buy it. That being said, if bitcoin is to serve as more of a currency like you said, more adoption is of course needed and that can only come with more of this kind of news.

I'd be vary of such orgs coming into btc trading... Sorta defeats the purpose of it surviving as a currency and only as a trading mechanism; which is not what it should primarily be.

I do agree, but don't forget that yesterday they also performed a 250 Millions buyback of their shares. This is not peanuts given their total Market Cap.

There always has to be someone to open the path. Like the first guy who bught pizza with bitcoin.

Now, if a company is thinking of trading fiat for bitcoin to have as a reserve of value, it's not going to be the first. Let's hope MicroStrategy is the first of many.

Interesting, I missed that bit, do you have any source for that?

Every firm has cash, this cash is managed by a Treasury department, who is in charge of maximising the return on this cash (think about a firm based in Switzerland, where you actually pay money for your cash balance in your saving account) investing it in low risk bonds (t-bills) Short money market operations or FX operations to minimise the exposure to different currencies..
Every firm has a "reference" currency, mostly based on the location of headquarters (AAPL has inflows in many different currencies, but ultimately the balance sheet are in USD, so they try to manage all their cash in USD terms). Well, apparently, MicroStrategy choose to elect Bitcoin as their "base" treasury asset. This means, probably, all the resto f their business is going to depreciate massively against their cash balance. (hopefully...).

Regarding the shareholders part, that was part of a pre-announced part of capital allocation, approved by the shareholders (they had 500 mios reserves, half of those in BTC, half i shares buyback).


Another description:
IT's a start, of course other might follow. Maybe Facebook will do the same with their Libra, one day.


I strongly doubt that. Those are exchanges, and their business is the exchange of Cryptoassets, not the custody. I expect the elected venue for the custody to be BitGo, who is the leader in the custody sector. Please note that BitGo is insured on their funds, as some of the exchanges (Gemini and Binance) are, with varying degree of security.
This is only my tough, I didn't read anything about that, for now.

Yesterday MicroStrategy stock price went up by 9.12%, despite Nasdaq ended the session in the red.
Markets seem to appreciate.

Yep, that custody question is a good one. Maybe BitGo as another option. The press statement they recently came up with looked as if they know what they are doing so I assume they will come up with a name soon. It will also benefit the custody provider big time. But maybe it´s just a random Metamask wallet haha