Topic: MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 54. (Read 17191 times)

If I recall that around the time of that 2014 auction, the then dominant theory was that any coins being auctioned off by government were going to be acquired at bargain prices and then subsequently dumped on the market - therefore still being profitable bitcoins because such dumpening would cause BTC's price to go down so much - whether or not the dumper decided to subsequently buy back at lower prices.

Draper's then action of buying all the coins at higher than the market price was not exactly disclosed at the time, even though hints of such higher purchase price was made.  Furthermore, even though Draper represented himself as a bitcoin bull who would hang onto the coins that he bought, whenever the price would dump (or fail to go up) there were frequent proclamations that Draper was dumping behind the scenes, and that was causing the BTC price to either go down or fail to go up.  These days, we hear those kinds of similar nonsense speculations in regards to Saylor, too.  Saylor is going to dump, Saylor is able to dump, Saylor knows bitcoin is liquid, blah blah blah.. even though we get similar vibes from Saylor as we had gotten from Draper, and in essence Saylor is someone quite likely to HODL through decently long periods in order to allow market forces to play out (which are more likely bullish rather than bearish or even neutral).  

One more thing, regarding Saylor is that he has fairly clearly stated that he already has intentions to continue to buy BTC with incoming cashflow into the future - so I am NOT really sure how those ongoing buys would take place or how much of new incoming cashflow would be used, yet the point is that those kinds of statements in regards to ongoing buying intentions are more bullish than the largely radio silence that we got from Draper.... Draper did not say anything so clearly about engaging in ongoing buying of bitcoin, even though it is possible that between late 2014 and late 2016, he may have been doing so in small quantities on the sly.  Perhaps?


Oh yes.  Thanks for those reminders of past assertions, Lucius.. and also the video link.  I believe that the linked Draper video interview that you provided would have been from late 2014, even though the upload date was May 15, 2015 - since the then current BTC price referenced in the interview was $413 (various dates in September, October or November of 2014 would have been possible for that $413 referenced-price).  By the way, BTC prices on May 15, 2015 were around $235, and BTC prices floated in the mid $200s for an overwhelming majority of 2015.

I did forget to mention, that Draper seems to project BTC prices that are several years out, and even though I doubt that anyone is any kind of soothsayer of specific prices, directionally, Draper has been getting bitcoin correct.. and even getting the specific number correct, too... at least, so far... and surely $10k in 3 years, did seem kind of ridiculously pie in the sky optimistic in mid-2015... just like his ongoing assertions of $250k for 2022/2023 has been seeming a wee bit pie in the sky optimistic, too.

I'll just refer to Tim Draper, whom I remember from 2014 when he told that in three years BTC would reach a price of at least $10 000, and was then the subject of ridicule in most of the business world - especially if we take into account the statements Buffett made about Bitcoin at the same time.

But he is one of the few who has spoken out in public, and a man who in 2018 gave his prediction that BTC will reach a price of $250 000 by 2022/23.

I think Saylor realized his mistake from the past and decided to correct it in the best possible way, so although some say he may have been a little late, I think he also realized that we are still at an early stage.

Totally agree on your points.
I am just noticing he paid more that market price at the time, because he gave value to the fact he bought from the government. So those coins could neve be deemed “illegal” or from a “fraudulent source”.
Fungibility is a privacy-related issue Bitcoin protocol is trying to improve on.

When you are participating in a public thread, you should expect that others might chime in (or bud in, as you put it) to points that are being made within such public thread.

It seems that I have otherwise already stated my various points, and pretty much you continue to misrepresent, even straight forward matters.  I don't see any utility in continuing to repeat variants of points that I have already made.



You repeated the same thing in different words in this here second response... so I can just say ditto to my already made response as well.   

By the way, on a somewhat substantive point, it will be interesting to see how these matters play out.... and surely, Saylor has made quite a few rounds in the bitcoin podcast space, and otherwise receiving a decent amount of attention.

Still his overall investment of $425 million at an average BTC price of $11,111.11 remains a wee bit under water - at least in terms of the face value of the purchase.

I recall in mid-2014, Tim Draper looked kind of like a fool too, when he had purchased around 30k BTC for about $600 each, when he won all of the silkroad auctioned coins... which would have been a $18 million dollar purchase for those coins... around the same quantity of coins that Saylor got.

Presumably Draper won all those BTC from the auction because he outbid everyone else, so part of the dumbness that he seemed was that he largely stayed in the red in regards to his BTC purchase for about 2.5 years - then all of a sudden in late 2016 and into 2017, he started to look like a genius.

Could be that we might be thinking about Saylor in those kinds of ways similar to Draper, but I doubt that Saylor is going to have to wait even a year or so before he starts to look like a genius.  I do agree that there are scenarios in which BTC prices could remain stagnant for a couple of years too, so we will see how it all plays out in terms of the $11,111.11 per BTC purchase price.

Lol, I know you doubt it, that's why you're objectively wrong. Go back and read the thread, it's all there in black and white. I made a post based on something in the OP. Someone responded to me, and I responded to them. Then you responded to me asking me why I had my head in the sand. You butted into a response that had nothing to do with you to attack my opinion and then wondered why I took issue with you after that. It's not open to your interpretation you absolute unit.


Again, nope, not what happened. I didn't address you until you addressed me. I didn't come in here talking to you at all. And I didn't take issue with your (still dumb) claim until you brought it up in response to my response to someone else's post after you already attacked me.  Go look for yourself ffs.  I 'm getting tired of correcting you on your confusions.

You can't even get simple facts right. That's why I'm no longer even bothering with your opinions.

The point is that Bitcoin is here, available for everyone. It's a low hanging fruit waiting to be picked up by smart individuals, or, to stay in topic, by smart CFO.
Are you familiar with the absurd meme "I bought this pizzas for 10,000 BTC in 2010 and now those are worth millions?"
Well, there is no difference in this respect from having or not having bitcoin in your portfolio.
Everyone is exposed to BTC appreciation.

When you see a small time coin that nobody heard about and some guy comes in bitcointalk and shills about it because it is such an awesome project for the future according to him, that is basically what wall street people feel about in real life when you talk to them about bitcoin.

Obviously the difference is bitcoin has already proven to be very good because it is over 10k and we reached 1 trillion dollar crypto market cap as a total in a world 15x is wall street stock market as a whole, so it was really proper at one point and the coin people usually shill are not proven and they are usually bad. However the idea is the same, there is some trustworthy and used and proven big market and you tell them this brand new (10 years is short for wall street) that is better, obviously they could be suspicious.

Yes.  That seems to be part of your problem generalized blanket statements that fail/refuse to account for specifics.


Good.  I am glad that you own some, even though you believe that Microstrategy took too aggressive of a BTC position.


Similar to me, then.


So?  Other people who have invested in bitcoin are not necessarily that either.


Hm?  Do you also recognize that there are a lot of different perspectives about bitcoin that also might be valid?

I am not suggesting that your view might not be valid, but currently, you seem to be suggesting that you might have some kind of a superior perspective, for some reason (being in the investment industry, perhaps?)


Sure.. no problem assessing risk of an asset and also your level of tolerance of it and also maybe having a plan that attempts to deal with your perception of that risk in order that you feel comfortably financially and psychologically in terms of how much you invest into bitcoin, if at all.


I doubt it.

You came in contending that a claim of mine was outlandish... which was more or less that investors could potentially later sue fiduciaries for failure to take a position in bitcoin, and you seem to throw out other battles to bash Microstrategy and my perspective of microstrategy and it seems that you had hardly even looked into specifics of the way that microstrategy had gone into bitcoin, so after you read up on the matter, you then said that you would still take the same position as you had done earlier and proclaimed that everyone, including myself, was too bullish about bitcoin and without having much of any evidence.. and blowing matters out of proportion... blah blah blah.. just making shit up, largely.. in order to back up your earlier ill-researched and generalized stances.


Good.  Seems that we have already beat that one to death anyhow.  I made my points and you made yours, and hardly even seems very relevant in the whole scheme of things.


Acting and failing to act might be two sides of the same coin, but sometimes failing to act can also be framed as actions that are NOT responsible and breaches of fiduciary duties as I have already gone over that point, more or less to the extent that it matters anymore;.. such as keeping all of investment in cash.. without taking other investment actions or researching or considering.. whether bitcoin or otherwise or even looking into the matter of bitcoin and having a reason NOT to invest in it, especially if it becomes a kind of standard (I am not even saying that bitcoin has currently reached that level of being a standard, yet).

Damn mate, I don't have the energy to go point by point with you when so much is not deserving of a response or little substance was added. I'm just going to ignore the inconsistencies and give some blanket responses to some of your more salient points that are worth responding to.

My whole entry into this discussion was stating I wouldn't be interested in any company that took this large of a stake in a volatile asset and tried to tell me it was less risky than cash. That's where I came in, that's been my point this whole time. Having this opinion is not incongruent with owning bitcoin, which I do.

I got into bitcoin around the end of 2013, around the time it was garnering major attention for the first time for breaking $1000.  Continued to buy for the next 2 years as the price bounced all round the $200 to $600 range. Like I said previously, I'm interested in it and I have enough exposure to care what the price is. But just because I own it doesn't mean I'm one of these lambo dreams to the moon types of people. I work in the investment industry. I recognize what bitcoin is and what it isn't and where it sits on the risk scale compared to other types of assets.  So I came in with the opinion that I didn't like all the risk by MicroStrategy and wouldn't invest in them, and your response to me was to ask me why I had my head in the sand, and that's where everything went from there.

And for the record, because this one is really rankling me, there is never a cause of action for breach of fiduciary duty for failing to invest in an asset that has nothing to do with the underlying business of the company. People can and will sue for anything, but you will never, never have a judgment against a company for not investing in bitcoin. There is no cause of action there. It is not possible to place an affirmative duty on someone to do something that is not part of their mandate.

They were able to buy the substantial amount of bitcoin in a relatively short amount of time without sending the price through the roof.  This should give us an indication that the market is large and liquid enough to absorb that kind of order without significant price movement.  If it's true on the buy side, it's not unreasonable to think it would be relatively the same on the sell side.

MicroStrategy was good enough at not moving the price while buying, I am sure they will be good enough at not moving it while selling. This is also a stress test for bitcoin markets: being proven deep is a prerequisite to be considered a liquid and mature market.

Regarding the spreadsheet, yes, I have been working on it lately and I will work on it as soon as more data will become available. Even if I don’t think Grayscale would be interested in buying bitcoin from corporate treasuries.

I do believe that there are some BIGGER companies that are able to source large quantities of BTC, even perhaps approaching quantities of 38k-ish over the counter (OTC).... but sure, maybe they are sourcing from a few different places including getting some of their BTC on exchanges, too..

Think about Grayscale and square and folks like that.  

Maybe some of them source in 1k to 5k increments from different places?  I surely don't proclaim to know any inner-working particulars except that some of those kinds of BIGGER player companies do seem to be acquiring a decent number of BTC on a regular basis.

See the most recent chart (below) about grayscale's and square's regular and ongoing BTC accumulations in fillippone's Grayscale thread.. and also seems that a third-quarter update should be forthcoming, too  (get to work, fillippone!!!!).

You are overstating the claim in order to get caught up in the weeds...

You do have fiduciary responsibilities when you are handling other people's money, and surely claims are made based on industry standards, whether you are going along with standards, whether you have reasonable basis for the various investments that you make and how well you are making disclosures to those people entrusting you with their money.


Great.  I am looking forward to you saying something smart and/or helpful.


We surely need people with experience and common sense to be contributing ideas, that's for sure.


I was talking about disclosures and allowance for any bitcoin skeptics to get out of the company before the company entered into the bitcoin investment.

Furthermore, this particular company seems to have had a decent amount of additional flexibility beyond regular companies since it seems that Saylor holds a majority voting share, so in essence, he is able to do whatever the fuck he wants - and surely, he is covering his ass extra when he both discloses to shareholders and his board of directors what he is planning to do, gives the board opportunities for input and gives both shareholders and board members sufficient and adequate opportunities to get the fuck out (even at a then premium), if they so choose.


Are you distracted?  What does that have to do with anything?


As I have already discussed, we can agree to disagree on this aspect, mr expert.


I don't need to pick any lane.  People can decide what the fuck they want to do.

Of course, Saylor and Microstrategy took a way more aggressive position than many companies or individuals would do.

I generally recommend that people start out by assessing bitcoin in terms of their overall quasi-liquid investment portfolio and that they take somewhere between 1% and 10% allocation in bitcoin.  Of course, higher up is more aggressive and lower down is a lot more conservative, but in the end of the day, each person has to decide for himself where they want to start and if they feel that they are justified at any point of the range or going beyond the range.

There is no fucking exact one stop objective answer regarding how much to allocate into bitcoin, exactly.

They have to calculate based on their own situation to figure out the extent that they are adequately balancing their risks based on the variety of factors, and of course, companies might have some factors that go beyond what individuals would consider, but they are going to be similar to the individual factors which are:  cashflow, other investments, view of bitcoin as compared with other assets, timeline, risk tolerance and time, skills and abilities to plan, learn along the way and tweak along the way which includes reallocating and trading if suiting.


I think that if as time goes along, and a lot of BIG ASS companies and traditional financial people are both taking positions in bitcoin and putting information out there regarding their reasons for doing so, and if you are a fiduciary who keeps his/her head in the sand and failing/refusing to consider certain kinds of investments, such as bitcoin, then you may well be found to be fiducially irresponsible at some future date.. especially the more and more that information is out there and becoming more mainstream and you as a fiduciary are burying your head in the sand.  You better at least look into the matter.. and maybe we are not close to that kind of necessity yet, but down the road, you might start to look like a goddamned fool if you keep your money in cash and fail to protect the value of your investment when it appears quite likely that cash is NOT a great place to keep your value in the longer term.. especially looking at a timeline of at least a few years.


Well, I am glad that you at least looked into the matter.  Better than just spouting out random ideas without even looking into the matter, as you had done previously.

Regarding your still being convinced that bitcoin is NOT a good investment  or that Microstrategy took too strong of a position in bitcoin, that is your choice.  

I had heard those kinds of nonsense claims plenty of times in the past nearly seven years (that i have been watching this space) regarding bitcoin not being a good investment, and it seems that bitcoin's investment thesis is even stronger today than it had been 7 years ago, 4 years ago or even 2 years ago.  

Seems to me that the longer that bitcoin is in existence and continues to be developed upon with a variety of strengthening network effects under metcalfe principles and even Trace Mayer's outlining of network effects, the more compelling that the investment thesis of bitcoin seems to become.


He seems pretty articulate on the bitcoin topic, and seems to have studied up on it pretty quickly...

I think that he asserted that he first started looking into bitcoin in about mid 2019 after he had sold one of his domain names (Voice.com).. but then it seems that his research into the bitcoin matter ramped up after the mid-March 2020 liquidation situation... and witnessing the extreme of the money printer go bbbbrrrrr reaction that was being taken.. that seems to have caused him considerable lack of confidence in regards to the seeming impending robbing of value of the about $500 million that his company had in cash reserves.

So, yeah, he was trying to figure out some ways to deal with the situation that he was perceiving and communicating that to his board members and share holders.. and his quick study of the matter does not appear to be flailing as a leader, even if your assessment of the proper direction differs from the direction that Saylor took to try to figure out the matter and to try to create some strategies and plans to go forward based on the cards that he has (rather than the cards he wished that he had).

 

Sure.  Those matters might be relevant, regarding his character and his competencies, perhaps.  He still seems to have a pretty decent grasp of bitcoin, and sure each of us have to come to our own assessment, including him, if he was the one that was leading the charge towards his allocation (or perhaps overallocation) in bitcoin.

 

Sure, they likely had evidence that some of his past behaviors were violative of SEC standards, and for the most part, previous settlements are not allowed to be brought into future cases, unless there are some kind of exigent circumstances.

In any event, I am not sure what you are getting at, here?  You believe that Saylor might be engaging in some kind of legally problematic behaviors?  Maybe he was able to get better legal advice this time around in terms of learning from past errors that he may have made?  I doubt that you can really proclaim that currently, Saylor is violating some kind of SEC standard in terms of his recently having taken a seemingly aggressive investment stance in BTC, merely because he had some issues with the SEC in the past.

You do realize that CEOs who are majority shareholders tend to be pretty eccentric kinds of creatures and maybe even arrogant and gambler types, but that does not necessarily mean that they are necessarily making bad decisions or that they might not have adequately balanced the various factors in these circumstances for themselves (or their company) even if you, personally, would have decided those matters differently, less aggressively and/or more conservatively.

 

Not unusual, and seems to be a pretty decently BIG "so what?"
 

Huh?  I don't remember doing any of that.

Bitcoin will do fine with Saylor or not..

Honey badger does not give any shits, but surely, the news is surprisingly bullish for bitcoin, even though such happenings is no kind of condition precedent for bitcoin.

Bitcoin is quite likely to have very decent upside whether Saylor et al get on board or not, even if the contagious behavior of saylor's action might cause BTC to have pumpenings that end up being greater than expected.

Who know?  

Personally, I hardly give any shits.

Sure, I become more richie if BTC prices go up, but I am pretty well off already, including in terms of my BTC investment and I have other investments too... yet the fact that BTC's 200 week moving average continues moving UPpity does seem to be quite bulllish too, on an ongoing basis...

Right now Bitcoin's 200 week moving average is about $6,700, so that remains quite amazing with the passage of time continuing to go up.

 

Good.  Let him do whatever the fuck he wants to do... If he wants to shave off some profits on the way up, then he has that choice, because bitcoin is pretty damned liquid.

Even if you are trying to suggest that Saylor might have bad intentions to dump on the market and to buy lower, he does not really seem to be playing that game, but whatever, those are his bitcoins (of course his company's) and he can do whatever the fuck he wants.




Who's dying?  I accomplished the vast majority of my initial BTC accumulation in 2014, so I have largely been in a BTC maintenance stage ever since late 2014.  Sure, I have accumulated some additional BTC after late 2014, and I have even engaged in some trading strategies with some of my BTC stash, but I am NOT like in any kind of desperate position on any kind of personal basis.

Regarding other investors they have to decide for themselves what they are going to do in regards to investing in bitcoin, if at all.  That is their choice.  Like I said, I suggest a 1% to 10% allocation into bitcoin as a starting point, but of course, any person investing into bitcoin needs to figure out his/her individual circumstances - regarding what their BTC accumulation goal is and how to get there and how to manage such BTC once they get into a maintenance stage - and sure some people will go into liquidation stages too.

Currently, I personally consider BTC to be a longer term investment with a minimum of a 4 year investment time horizon, and of course, the longer the investment time horizon the better.  When I got into BTC, I was quite a bit more hesitant about how much confidence regarding investing beyond one or two years, but these days there seem to be a lot more developments and even underlying confidence building in the strength of bitcoin's foundations that should allow a large number of folks to create and to practice at least a 4 year investment timeline - and surely, if they do not have 4 years, then surely they have to adjust their strategies accordingly because that seems more like gambling rather than investing, which personally I do not recommend.

Of course, no one who gets into bitcoin is necessarily locked into the investment, so they should ensure that they have ways to get out of the investment, if they so choose, do not invest more than they can afford to lose, and also appreciate that they can liquidate (some or all) at any time of their own choosing, even though I am recommending to come into bitcoin with at least a 4 year investment timeline... people ultimately have to choose for themselves and they are responsible for their own investment choices including whether they feel that they need to tweak their investment strategies, or to diversify in or out of bitcoin within their own determinations and discretion.
 

You seem to be a petty twat, jaysabi, who fails and refuses to appreciate the forest for the trees.  

There remain all kinds of factors beyond the one that you are focusing upon, so if you merely want to frame my various ideas on the topic in that way, then that seems to reflect more upon your own myopic stance, rather than my own.

Hopefully you, on a personal level, have NOT failed or refused to take any kind of actual position in bitcoin rather than spouting out what seems to be ongoing nonsense that nocoiners tend to spout out.

Are you recommending any kind of modest position in BTC at all rather that what seems to be Microstrategy's more aggressive BTC approach, or what exactly are you recommending in regards to BTC? Or are you just maniacally focused upon whether a future lawsuit against fiduciaries staying in cash rather than taking a position in bitcoin would be a viable possible lawsuit, when it hardly even matters in the whole scheme of things whether such future possible lawsuit might be viable or not.. hardly even a center of focus, or shouldn't be from my point of view.

I do agree that there is no way anyone would sell 38k bitcoins all at once, first of all you can't find a buyer that big, it is too much of a money, it would take a huge billionaire or a billion+ dollar company to buy it all without considering the huge risks involved with buying that much bitcoin all at once.

However another thing is, if you are involved with crypto this much that you bought 38k bitcoins, you should also not be really worried about losing few dollars here and there, obviously bitcoin could go down sometimes but if you bought hundreds of millions of dollars worth of bitcoin you knew this before you got in. So, they will be ready for all the downs and they are looking forward for the big bull run because at that point they could still sell some, to pay off investors.

Lol, the dumbest and most out of touch thing in this thread is the assertion that companies that don't invest in bitcoin are going to face lawsuits from shareholders of those companies.  So yeah, compared to how ridiculous you have to be to believe that, I'm an expert compared to you.  For everyone else, I'm just someone with a couple decades of experience in the industry and the slightest bit of common sense.



It doesn't matter how microstrategy bought all that bitcoin, all that matters is they bought all that bitcoin. The risk of owning bitcoin is not mitigated by how it was purchased.  If bitcoin drops 20%, as it is prone to do, and Saylor decides to exit the position, you'll see shareholder lawsuits. And what will not be a valid defense to breach of fiduciary duty is how the bitcoin was purchased.



Are you admitting it then?  Because then you need to reconcile the fact that you do think this is a boatload of risk with the tone of the rest of your post, which treats a bitcoin investment as automatic upside so much so that you think that companies that don't invest in bitcoin could be sued for not doing so.  Pick a lane dude.  You either think this is such a slam dunk no-risk investment that companies that don't invest in bitcoin could face shareholder lawsuits for not doing so, or you think there's a ton of risk here that you haven't previously admitted.


I've looked into this whole situation more and I'm even more convinced this is going to end poorly for microstrategy.  The guy running microstrategy is flailing as a leader.  The business's revenue has been falling for 5 straight years.  He was previously accused by the SEC of overstating company performance, a charge he settled without admitting or denying the charges, which decimated the company's stock.  As someone who works in this industry, nobody agrees to the settlements when they're innocent and the SEC only allows them to neither admit or deny the charges because the SEC isn't interested in prolonged court battles except in the most egregious of cases.  It's much quicker to let them pay a fine for their bad behavior and believe their promises that they learned their lesson.

On top of all this, all the lofty bullshit you're heaping on him about "investing for the next 100 years" or being a visionary is all hype and it's your baggage your lambo hopes and dreams you're putting on the situation.  Saylor himself says he's not a crypto diehard and he's not married to this investment.  If it turns bad, he's stated he's prepared to liquidate it "any day of the week, any hour of the day."

This is an incredibly stupid hill to die on.  But you're welcome to continue embarrassing yourself with your hyped up statements about how committed Miscrostrategy is to Bitcoin (they're not, by Saylor's own words) and how any companies not investing in Bitcoin are going to face shareholder lawsuits (they won't, for the same reason you can't sue a company with excess cash 20 years ago for not investing in Amazon).

I just checked the original article, and that statement is between speech marks. This is not creative journalism, but something he really said. This is a pretty clear statement: we are not pre-committing.
Nothing to worry about about.

You're welcome, I thought it was important information in order to get a more complete picture of what might happen to the purchased BTC in the future. But there still seems to be a bit of creative journalism in that story, at least that’s what Saylor says in her tweet.


https://twitter.com/michael_saylor/status/1308759164219543552

How to interpret such a statement now, is it really creative journalism in this case, from one of the most relevant sources of information in the business world, or does Saylor just want to soften his statement?

Thank you very much @lucius for this article. It is very useful to understand the reasoning behind Mike Saylor decision. Yes, even if he insists he asked the opinion about this also to other shareholders, I think that with more than 70% of the voting power this was pretty irrelevant.

Also knowing he settled some very worrying accusations is something worth knowing.

Going beyond cash is certain because anyone who holds bitcoin, they can transfer their money around the world in minutes but not with cash. Bitcoin is real, cannot be tampered with, but cash does.
Microstrategy buys bitcoins for profit, and they will sell them when it makes a profit. They are no different than traders in the market.

But just as it is quite realistic and open about selling everything the company has bought - if the conditions are right. Although some are afraid of this, I don't think it should affect the market too much - just as the purchase itself did not affect the price to a significant extent.