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Topic: MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ - page 68. (Read 20676 times)

hero member
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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.


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.
hero member
Activity: 2240
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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.
newbie
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There are too many big trusts one the market already. They can control the market, isn't it?
legendary
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^^ 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? Shocked
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. Grin
legendary
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Fully fledged Merit Cycler - Golden Feather 22-23
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.




legendary
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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.
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.
full member
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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.
legendary
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Fully fledged Merit Cycler - Golden Feather 22-23
Yesterday MicroStrategy stock price went up by 9.12%, despite Nasdaq ended the session in the red.
Markets seem to appreciate.

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.
legendary
Activity: 1372
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This is so bullish. A new era for Bitcoin in the path of a recognition as a superior Store Of Value.
Maybe.  It would be far more bullish had the company been Microsoft or Amazon.  And I'm not sure how big a story this is overall.  You and I certainly find it to be incredible, but that doesn't mean the market is going to react to it at all.  We'll see.

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.
legendary
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Is there any indication anywhere that they bought actual tangible Bitcoin? Lots of people started to froth when Paul Tudor Jones made his announcement but of course it was nothing but futures.

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

This is so big: A publicly traded  firm decided to invest half of his 500 millions excess cash reserves buying bitcoin, deliberately dumping the ever value loser, inflationary, exponentially printed fiat currency, to embrace the superior hard money, digital gold, Bitcoin.
I agree.  MicroStrategy isn't a huge company in terms of market cap ($1.3 billion), but the fact that they'd buy a huge amount of bitcoin to hold as its "treasury reserve asset" (I don't know exactly what that means) is indeed big news for bitcoin.  What I'm wondering is what their shareholders are going to think about it, and I'm putting MSTR on my stock watchlist.  I'd never heard of them before, but it looks like they've been around for years and their stock has done pretty well over the past decade.
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).

And lol, reading the summary of what the company does, I can barely understand a word of it:
<...>

Another description:
This is so bullish. A new era for Bitcoin in the path of a recognition as a superior Store Of Value.
Maybe.  It would be far more bullish had the company been Microsoft or Amazon.  And I'm not sure how big a story this is overall.  You and I certainly find it to be incredible, but that doesn't mean the market is going to react to it at all.  We'll see.
IT's a start, of course other might follow. Maybe Facebook will do the same with their Libra, one day.

I wonder who is handling the custody of this for them.  That was probably the hardest part of the whole thing for them to work out.

I figure it could be Greyscale, or one of the exchanges (Gemini? Kraken? Coinbase?).  Could be Bakkt? Of course they could do it themselves, but that is a fairly serious security undertaking when $250MM is the amount of value.

If it's actual coin then one of your list no doubt. I'd love to sit in on the pitch these custody places give them. A lot of people will come to them knowing nothing and nothing about their specific company either. There's no possibility of any of it being insured either.

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.


legendary
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Yesterday MicroStrategy stock price went up by 9.12%, despite Nasdaq ended the session in the red.
Markets seem to appreciate.
member
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I wonder who is handling the custody of this for them.  That was probably the hardest part of the whole thing for them to work out.

I figure it could be Greyscale, or one of the exchanges (Gemini? Kraken? Coinbase?).  Could be Bakkt? Of course they could do it themselves, but that is a fairly serious security undertaking when $250MM is the amount of value.

Looking at the news I do not see that detail.



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
legendary
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Welt Am Draht
I wonder who is handling the custody of this for them.  That was probably the hardest part of the whole thing for them to work out.

I figure it could be Greyscale, or one of the exchanges (Gemini? Kraken? Coinbase?).  Could be Bakkt? Of course they could do it themselves, but that is a fairly serious security undertaking when $250MM is the amount of value.

If it's actual coin then one of your list no doubt. I'd love to sit in on the pitch these custody places give them. A lot of people will come to them knowing nothing and nothing about their specific company either. There's no possibility of any of it being insured either.
legendary
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Note the unconventional cAPITALIZATION!
I wonder who is handling the custody of this for them.  That was probably the hardest part of the whole thing for them to work out.

I figure it could be Greyscale, or one of the exchanges (Gemini? Kraken? Coinbase?).  Could be Bakkt? Of course they could do it themselves, but that is a fairly serious security undertaking when $250MM is the amount of value.

Looking at the news I do not see that detail.

legendary
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Top Crypto Casino
This is so big: A publicly traded  firm decided to invest half of his 500 millions excess cash reserves buying bitcoin, deliberately dumping the ever value loser, inflationary, exponentially printed fiat currency, to embrace the superior hard money, digital gold, Bitcoin.
I agree.  MicroStrategy isn't a huge company in terms of market cap ($1.3 billion), but the fact that they'd buy a huge amount of bitcoin to hold as its "treasury reserve asset" (I don't know exactly what that means) is indeed big news for bitcoin.  What I'm wondering is what their shareholders are going to think about it, and I'm putting MSTR on my stock watchlist.  I'd never heard of them before, but it looks like they've been around for years and their stock has done pretty well over the past decade.

And lol, reading the summary of what the company does, I can barely understand a word of it:
This is so bullish. A new era for Bitcoin in the path of a recognition as a superior Store Of Value.
Maybe.  It would be far more bullish had the company been Microsoft or Amazon.  And I'm not sure how big a story this is overall.  You and I certainly find it to be incredible, but that doesn't mean the market is going to react to it at all.  We'll see.

Is there any indication anywhere that they bought actual tangible Bitcoin? Lots of people started to froth when Paul Tudor Jones made his announcement but of course it was nothing but futures.
The article says they bought a specific number of bitcoin, so I'd infer that it's actual bitcoin and not a derivative.
legendary
Activity: 2590
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Welt Am Draht
Institutional interest in BTC futures is nothing? Seems like a pretty big deal in terms of legitimacy, if nothing else. It would be silly to assume institutional traders are all going to jump balls deep into actual BTC custody.

It's the difference between just another play on their legacy dashboard and delving deeper but I totally get why they'd stick with what they know if that old stager makes it available to them. Obviously in this case with such a huge portion of their funds it's a proper macho move.
legendary
Activity: 1806
Merit: 1521
Is there any indication anywhere that they bought actual tangible Bitcoin?

"MicroStrategy...announced that it has purchased 21,454 bitcoins..."

Sounds like it to me, but who knows?

Lots of people started to froth when Paul Tudor Jones made his announcement but of course it was nothing but futures.

Institutional interest in BTC futures is nothing? Seems like a pretty big deal in terms of legitimacy, if nothing else. It would be silly to assume institutional traders are all going to jump balls deep into actual BTC custody.
legendary
Activity: 2590
Merit: 3015
Welt Am Draht
Is there any indication anywhere that they bought actual tangible Bitcoin? Lots of people started to froth when Paul Tudor Jones made his announcement but of course it was nothing but futures.
legendary
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Fully fledged Merit Cycler - Golden Feather 22-23
First, the news:

MicroStrategy Adopts Bitcoin as Primary Treasury Reserve Asset
This is an episode of The Pomp Podcast with host Anthony "Pomp" Pompliano and guest, Michael Saylor, an entrepreneur and business executive, who co-founded and leads MicroStrategy, a company which provides business intelligence, mobile software, and cloud-based services. He has become well known in the Bitcoin community for using the company's ibalance sheet to purchase more than $400 million of Bitcoin.

In this conversation, we discuss how Michael built MicroStrategy, what his $500 million dilemma earlier this year was, and why he choose to put more than $400 million into Bitcoin with the company's balance sheet.



Also thanks to @lucius, a nice article from Bloomberg, detailing a few interesting bits.

Firstly: Saylor is not a bitcoin zealot:
CEO Says Bitcoin Is Safer After Moving Firm’s Cash to Crypto

Quote
Even so, Saylor said he’s not a crypto diehard. If bond yields jump, for instance, he said he won’t hesitate to dump the cryptocurrency, though he has no immediate plans to sell.

“We can liquidate it any day of the week, any hour of the day,”Saylor said. “If I needed to liquidate $200 million of Bitcoin, I believe I could do it on a Saturday. If I took a haircut, I believe it would be 2%.”

Well, we knew that, as for sure he elaborated some thought from 2013:




Another important bit of information, I was already aware of is settlement with the SEC:

Quote

This isn’t the first time Saylor has garnered headlines. He lost billions in personal wealth after the shares tumbled when the company was accused by the U.S. Securities and Exchange Commission of overstating results. Saylor reached a settlement in 2000 without admitting or denying guilt.


More information here.

Micheal Saylor owns 67% of voting rights of MicroStrategy. Just remember that. When he says MicroStrategy decided to" he's actually saying "I decided to".

From their SEC Filing:
Quote
Because of the rights of our two classes of common stock, and because we are controlled by our existing holders of class B common stock, these stockholders could transfer control of MicroStrategy to a third party without the approval of our Board of Directors or our other stockholders, prevent a third party from acquiring MicroStrategy, or limit your ability to influence corporate matters
We have two classes of common stock: class A common stock and class B common stock. Holders of our class A common stock generally have the same rights as holders of our class B common stock, except that holders of class A common stock have one vote per share while holders of class B common stock have ten votes per share. As of February 2, 2009, holders of our class B common stock owned 2,770,244 shares of class B common stock, or 75.2% of the total voting power. Michael J. Saylor, our Chairman, President and Chief Executive Officer, beneficially owned 399,800 shares of class A common stock and 2,429,582 shares of class B common stock, or 67.1% of the total voting power, as of February 2, 2009. Accordingly, Mr. Saylor is able to control MicroStrategy through his ability to determine the outcome of elections of our directors, amend our certificate of incorporation and by-laws and take other actions requiring the vote or consent of stockholders, including mergers, going-private transactions and other extraordinary transactions and their terms.
Source:
https://ir.microstrategy.com/node/17726/html

Recapping with a simple image:



Saylor controls 67.1% of the voting capital of the company. Hence he can dictate everything in the company.
Of course this can be viewed as a call to stability and focus on business, as they stated in some interviews, but this is actually relevant information not to be ignored while reading the statements in the first paragraph.


Also worth Noticing Salyor himself owns many bitcoins.
 


https://twitter.com/michael_saylor/status/1321422012380753921?s=20

Again, the point he informed the managers, is laughable.



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