Topic: MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 6. (Read 14240 times)

An important development for Microstrategy and every other firm (Tesla, SpaceX, Miners) holding bitcoins on their balance sheets:

MSTR: MicroStrategy, crypto holders can shift to fair value accounting, Bloomberg says

Firms can now hold bitcoins at their mark-to-mark value.
Currently average price for Microstrategy is slightly above market price, not big day-one effect.

MSTR has leverage which would be a positive and negative, ultimately I would want to step away from that vulnerability.   Usually leverage costs money and it may be expensive to unwind when or if BTC became unpopular for speculators.  Right now we appear to have a decent long term trend, with every quarter despite upsets is slightly less negative tone so its an accumulative atmosphere.  The lowest prices are the best guidance not uneven peaks.  This build in sentiment is only just beginning but its quite possible it keeps on track for some time.
  I just wouldnt want to have MSTR when people peak in sentiment or get too hyped, thats when its best to deleverage; I cant assume Saylor can ride that wave perfectly.

Arbitrage appears a good idea, I agree it seems smart ideal value realization but also it can add risk instead of being the profit anticipated from the gap closing.  Most famous example of arbitrage failure is LTCM which involved Nobel prize winners, Im not that clever so I presume its alot harder then it looks.   My general take is volatility rises in many assets and its normal to expect that in BTC.

OK.


If you mean GBTC's current discount to Net Asset Value, then it will be a gamble. I heard Silbert has been having bankruptcy issues involving one of his companies?

MSTR is up 200% since January, Bitcoin is up probably just 90%. Once ETF approvals are taking place = Bitcoin will surge, and I'm very confident that MSTR will again surge more. But, saying it like a broken record, I'm the stupid pleb.

I didn't suggest shorting MSTR outright, I said shorting vs Buying GBTC.
In case of a Bitcoin really post ETF approval, you want to be long GBTC, not Microstrategy. The latter will always have a (negative) overhead over bitcoin valuation. So there will no point holding it once an ETF is approved.

But the point is if an ETF is approved, Bitcoin will surge then expand the value of MicroStrategy's balance sheet, therefore making the actual value of MSTR go up. But if MSTR is sold because "reasons" and its price crashes down, THEN the stock is undervalued because of MicroStrategy's surging Bitcoin in the company's vaults. It will be a golden investment opportunity.


That's a strawman and outside the context of the debate. Because those other industrial activites could add value to the company too, and Chad Saylor could also decide to buy more Bitcoin from company profits.

That's true.

 


Technically true, but it does not seem too likely.


By the way, it seems that I already commented on this topic when fillippone mentioned it earlier (and he said something like long Grayscale, short MSTR or were you talking about another topic fillippone?... anyhow, gosh the topics are blending their lil selfies.. and I am not going to take any of that advice since I buy my lil cornz directamente... and HODL them for dear life too.. or whatever it is that it seems that I might be doing with my cornz.. ), and it seems that I largely agree with Wind_FURY.. but hey whatever, fillippone does have a pretty decent theory - especially in terms of an actual ETF being a superior product in contrast to MSTR serving as a kind of substitute ETF (that's really not an ETF) for any of the large players/financial institutions trying to get bitcoin exposure, and it could end up playing out in fillippones direction..

....but in terms of the holders of cornz.. WHO CAReS!!!!!!   play with your stocks and your various forms of 3rd party holdings to your own content (play silly games and win silly prizes).. and when BTC is inclined to make money, you may or may not end up making money with whatever roulette table you are playing while the directamente cornz HODLers, including but not limited to yours truly will laugh our lil selfies all the way to the bitcoin node....

A lot of people hold Microstrategy because there is no better way to gain exposure to bitcoin price for an US professional investor than Microstrategy.
When an ETF is approved, then there will be a selling pressure on Microstrategy (stock) to buy the ETF.
The ETF has many advantages tracking bitcoin price over MSTR.
It is true that they hold BTC on their balance sheet, buttthey also have other industrial activities that can impact shareholders value. In addition to that, Micheal Salylor could decide to dump all the BTC and nobody could argue with it.

Ser, are you sure? What an irresponsible advice to suggest. Because even if there's an ETF approval for many asset managers, it doesn't change the fact that MicroStrategy still HODLs 152,800 Bitcoin in their balance sheet. If that surges in value, then their balance sheet will have a BIG PLUS sign in it, which will definitely be very good for MSTR's market value.

But I'm the stupid pleb, I could be wrong.

¯\_(ツ)_/¯

This is bullshit.
There is no reason to hold MSTR after an ETF is approved. This is an inferior vehicle to get exposure ti bitcoin price, no matter how much Micheal Saylor try to persuade us.
 
As I said, if you want to bet on an ETF approval you might want to short MSTR and long Grayscale.

In the below recent recording Saylor explains a question likely many investors have: what separates MSTR from other options owning bitcoin?

And to maybe answer my own above question. It might be the greater upwards potential, due to the cheap leverage MSTR has over other vehicles, explaining the premium. The premium might disappear over time when MSTR keeps on selling stocks to acquire more bitcoins (potentially next quarter up to a fresh $750,000,000)?

Second Quarter 2023 Financial Results Webinar Recording
https://www.microstrategy.com/en/investor-relations/events-presentations/q2-2023-financial-results-webinar-recording?wvideo=h57de89gas

Since many of the bitcoins MSTR owns are financed with debt, isn't the stock/business currently overvalued? I would think you can't just take the number of bitcoins MicroStrategy owns and multiply it with the current bitcoin price. However that is exactly what seems to be the case, even with a hefty premium at the moment.

Not trying to talk the stock down, I own some. But the pricing does not seem to be right unless I am missing something, other than there are currently few onramps for legacy finance adding bitcoin to their portfolio.

A very common way of looking at MSTR is considering the "enterprise value", which is the sum ok equity market cap and outstanding debt less the cash.
In this way, you can understand how much is valued over the BTC they hold on their balance sheet.

Selling more shares and the price rises represents quite alot of demand then, I agree its likely an ETF proxy.  People should be wary if thats the case as the share price can fall just as much but unlike an ETF he cannot alter the float as easily I presume.   They cannot buy back the shares when required like funds will do to regulate themselves, that would mean the share price could be erratic.
 Probably best to chart MSTR for its market capital and also include a check on any debt instruments or liabilities they have also.

Even if Microstrategy has been relentlessly buying BTC, they have been doing so by keeping the BTC per share quite constant:




This is interesting in the narrative of MSTR being an ETF-proxy instrument: if the BTC per share remain constant, then the price will be directly comparable with underlying asset performance: something very useful if you want to market yourself as the de facto Bitcoin ETF

I don't see that graph as very different from the Bitcoin graph. Since May 1, the Bitcoin price had a slight sustained decline until about June 15 where it started to rise. Maybe the end of the chart is a little different, being the MSTR one more pronounced upwards, but if we take into account the leverage it uses to buy Bitcoin, it is to be expected.


An ETF will always be better than MSTR shares in terms of security, although in terms of potential return the shares can give you a better return because of the leverage. However, we must always bear in mind that leverage means risk and more leverage means more risk.

MSTR is up a further 11% on the today. One thing that is likely to trigger the MSTR bullish movement is today's spike in BTC prices. Well Saylor is back at it and I'm glad to see that the BTC price rally is on the plus side in their treasury asset. Saylor made a Purchase of BTC in the last 2 weeks on June 28 to be exact and it was a perfect buy because on this day BTC touched $31.8k which is the highest price recorded this year after a big crash late last year.

Seeing as the market conditions are more supportive or getting big advances today I think BTC will most likely reach $35k this week. Well a few tweets will shake his imagination even more after the embers are over

Did I say I was never coming back to this thread?  Can't remember (liar!), don't care.

I'm bumpitty-bumping because I hadn't checked MSTR's stock price in a while but did so today.  I've got them and some other bitcoin-related stocks on my brokerage watchlist, like MARA, RIOT, and Coinbase.  And wow!  Bitcoin's price has been kind of stagnant and yet all of those stocks are booming.  Just for the record, here's an MSTR chart from May:



I guess bitcoin did jump starting in the middle of June, but for whatever reason my eyes nearly popped out of my head at the stock price gains.  Part of that is because I was thinking about buying some shares of RIOT a while back and didn't.  And I've been following MSTR for a long time now, and it looks like they own so much bitcoin that their stock has become a proxy for bitcoin--who needs a BTC ETF when you've got Microstrategy, right?

Crazy.

Edit: I apologize for the lack of markers on that graph.  TD Ameritrade became Schwab, and their website sucks ass.

https://saylortracker.com/

This is a very good news from them.
Michael Saylor's MicroStrategy Now Holds Over $4.6B Worth of Bitcoin

As of April to June only
From what I am seeing here, MicroStrategy will be one of the greatest Bitcoin giant firm in the world. I also discovered that they use lighting network to fast track their transactions.

Good spot.
They also have roughly 95 million in cash equivalent.
I suspect they will use those funds as well.