Why MicroStrategy can buy BTC but not other institutions?

mk4

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Quote from: Joan of Arc official on July 02, 2023, 03:18:26 PM

Yeah, really bullish on BTC, and maybe too much.
Because as you remind, you can't really predict the price. Don't forget playing with the company's funds is not the same as playing with your personnal finance. Different responsabilities since you have employees, shareholders, cash flow,...
You don't the MSTR going down to 0.

(edited to correct a typo)

The mere reason why they're averaging in, is actually because they know you can't predict short-mid term price.

And it's not even "playing with the company's funds" — there's a reason why holdings companies exist.

Coyster

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Quote from: ImThour on July 02, 2023, 05:59:14 AM

Other big institutions are waiting for ETFs, which will take time and it involves a lot of paper work and legal process. They choosing difficult way to be their own bank.

They are not even going to be their own bank, if you buy Bitcoin via Bitcoin spot ETF you are not your own bank because you don't have the keys to your Bitcoin and you don't even have to own any Bitcoin wallet at all, you basically just invest via the broker/firm that offers the ETF and you have to trust them.

Joan of Arc official

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Quote from: mk4 on July 01, 2023, 10:23:15 PM

Quote from: Joan of Arc official on July 01, 2023, 10:52:02 AM

I believe the company has trapped itself in a kind of DCA strategy to make up for last year's losses. (which must be in excess of 1 billion?).
So I don't know if they have any choice but to continue investing in BTC.

I'm pretty sure MicroStrategy has some smart-enough people to think that sunk-cost fallacy isn't the way to go. It's simply just the fact that Saylor is really bullish on bitcoin, and the fact that you really can't predict price in the short-mid term — hence MSTR being down months ago.

Yeah, really bullish on BTC, and maybe too much.
Because as you remind, you can't really predict the price. Don't forget playing with the company's funds is not the same as playing with your personnal finance. Different responsabilities since you have employees, shareholders, cash flow,...
You don't the MSTR going down to 0.

(edited to correct a typo)

imamusma

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Many other institutional investors don't need to do the same as MicroStrategy does, and that's because each of them has their own financial policies. Some say it's for safety and convenience, and I agree with that. But if they aren't brave enough to take the plunge in the first place and prefer to wait for the ETF, then perhaps then maybe they won't get a bigger return than MicroStrategy.

suzanne5223

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Quote from: a298b112 on June 30, 2023, 09:38:17 AM

If I understood it correctly spot BTC ETF will allow institutional investors to but BTC, and hence a lot of people waiting spot BTC ETF to be approved. But then how come MicroStrategy is already heavily invested in BTC? Why they can buy it, while other institutional investors waiting for ETF?

Institutional investors can invest in Bitcoin without the Bitcoin ETF but BTC ETF will only make institutional investors gain access to BTC investment within the regulated frameworks of traditional financial markets. That's the BTC ETF will give institutional investors some sense of guarantee that they are investing in genuine assets.
MicroStrategy is not an institutional investor and it's a business intelligence financial investment company. They handle crypto investment in charge of investors that are scared or don't have knowledge about crypto investment.

Hamza2424

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Quote from: a298b112 on June 30, 2023, 09:38:17 AM

If I understood it correctly spot BTC ETF will allow institutional investors to but BTC, and hence a lot of people waiting spot BTC ETF to be approved. But then how come MicroStrategy is already heavily invested in BTC? Why they can buy it, while other institutional investors waiting for ETF?

Hmm bro this is not that simple the elite families always go with the strategy as they never bring their investment in risky markets as you know they own a lot of business so they always prefer going with the legal teams, and law enforcement institutes and I hope you know about the SEC's policy from last year. All of them are waiting for a good time, in my view ETF approval is gonna be a good green signal for them.

tranthidung

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Quote from: aoluain on July 02, 2023, 04:11:13 AM

Microstrategy and Michael Saylor are indeed fully into "Bitcoin". Institutional investors
generally are not buying Bitcoin they are more happy to have a certificate to say they own
Bitcoin leaving it up to the ETF provider to make the transaction of acquiring the actual Bitcoin.

MicroStrategy is a very interesting case for Bitcoin institutional investors. They did not observe this market but actually joined it and did investment seriously. I also don't see them over leverage for investment which makes their investment is safe in long term.

In the past, we talk about Satoshi's lesson

Quote from: theymos on January 02, 2019, 10:51:55 PM

Satoshi is not awesome because he was watching the crypto world and had a brilliant idea. He's awesome because upon having this idea, he carried it out.

In future, we will talk about Microstrategy lesson.

Taskford

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Quote from: a298b112 on June 30, 2023, 09:38:17 AM

If I understood it correctly spot BTC ETF will allow institutional investors to but BTC, and hence a lot of people waiting spot BTC ETF to be approved. But then how come MicroStrategy is already heavily invested in BTC? Why they can buy it, while other institutional investors waiting for ETF?

Because MicroStrategy knows the potential of bitcoin and they already know how to deal with several market pressure that's why they are here buying more. While other institutional investors still skeptical about bitcoins existence since maybe they don't know yet where to start or if they could even start dealing with bitcoin. Maybe we can't blame them yet since to many warnings spreading about the risk of investing of it so maybe those institutional investors believe on negative about it for now and they didn't see the positive since no one make them understand on every situation happened on bitcoin.

ImThour

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Bitcoin Bottom was at $15.4k

Because MicroStrategy didn't waited for ETFs to launch to buy bitcoins, they simply bought it from OTC Trading platforms, from exchanges directly.
Other big institutions are waiting for ETFs, which will take time and it involves a lot of paper work and legal process. They choosing difficult way to be their own bank.

Crazy shit, isn't it? Roll Eyes

aoluain

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Quote from: BlackHatCoiner on June 30, 2023, 02:47:37 PM

MicroStrategy is heavily invested in the Bitcoin network, not just in bitcoins. Even though I have like months to watch what's happening with MicroStrategy and the like, I remember very well Sailor being obsessed with bitcoin and lightning.

I believe the answer to your question is that most institutional investors prefer the convenience and regulatory oversight an ETF can provide.

Microstrategy and Michael Saylor are indeed fully into "Bitcoin". Institutional investors
generally are not buying Bitcoin they are more happy to have a certificate to say they own
Bitcoin leaving it up to the ETF provider to make the transaction of acquiring the actual Bitcoin.

Its also worth noting that Microstrategy is a public liability company so they first have to
seek approval to buy Bitcoin before they do so and then have to make the purchase
public so everyone knows, what they do is not a bragging sort of notification, they are
required to do so.

Its the opposite with private companies, a lot of them in general could very well be buying
Bitcoin and we are not aware of it.

20kevin20

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Quote from: mk4 on June 30, 2023, 09:45:44 AM

Institutional investors can buy bitcoin today. A bitcoin spot ETF is so people and institutions can buy bitcoin without the need to use a cryptocurrency broker(like Coinbase) and worry on how to store their funds securely themselves. Then can pretty much just use their typical stock broker like Fidelity, etc and buy bitcoin as if it was a stock.

And here I am yet again afraid of the artificial inflation effect, just like 2 years ago. I wonder, will the supply of BTC sold through ETFs be verifiable?

komisariatku

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Bitcoin already has a strong and large community. Even if the bitcoin ETF didn't exist, bitcoin would be fine. However, it must be admitted that there are still many people who do not trust bitcoin. If a bitcoin ETF materializes, more people will believe in bitcoin and they can buy and store bitcoin easily,

The emergence of bitcoin ETFs will add strength to the bitcoin community. This is a good thing for bitcoin. Even though behind it all there are parties who benefit, it doesn't matter. Bitcoins are used by anyone and anyone to earn bitcoin profits. To be honest, I prefer bitcoin myself, with or without a bitcoin ETF

mk4

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Quote from: Catenaccio on July 01, 2023, 10:52:22 PM

They only can DCA Bitcoin if they have reserved capital for more investment or if they receive new capital from their investors.

They get big capital to DCA Bitcoin because they have big names in the list of top holders. Many big MSTR holders are Bitcoin Bulls.

Top 10 Owners of Microstrategy Inc and Top 10 Mutual Funds Holding Microstrategy Inc.

They have capital because they have reserves, and because the company actually has some revenue from their software products. (Yes, they actually have software products in the healthcare, retail, and financial services industry lololol.)

Catenaccio

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Quote from: mk4 on July 01, 2023, 10:23:15 PM

I'm pretty sure MicroStrategy has some smart-enough people to think that sunk-cost fallacy isn't the way to go. It's simply just the fact that Saylor is really bullish on bitcoin, and the fact that you really can't predict price in the short-mid term — hence MSTR being down months ago.

They only can DCA Bitcoin if they have reserved capital for more investment or if they receive new capital from their investors.

They get big capital to DCA Bitcoin because they have big names in the list of top holders. Many big MSTR holders are Bitcoin Bulls.

Top 10 Owners of Microstrategy Inc and Top 10 Mutual Funds Holding Microstrategy Inc.

mk4

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Quote from: Joan of Arc official on July 01, 2023, 10:52:02 AM

I believe the company has trapped itself in a kind of DCA strategy to make up for last year's losses. (which must be in excess of 1 billion?).
So I don't know if they have any choice but to continue investing in BTC.

I'm pretty sure MicroStrategy has some smart-enough people to think that sunk-cost fallacy isn't the way to go. It's simply just the fact that Saylor is really bullish on bitcoin, and the fact that you really can't predict price in the short-mid term — hence MSTR being down months ago.

Nwada001

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Quote from: un_rank on July 01, 2023, 02:13:48 PM

This is same with some people, they do not see Bitcoin as a safe investment and opt for less volatile options. There are also companies and even governments looking to get into bitcoin and there are more now than there was 5 years ago, and there would be more now than there would be in 5 to 10 years to come.

- Jay -

Exactly the same large institutions are integrating Bitcoin into their systems and allowing their investors to benefit and have the option of also acquiring some Bitcoin, just as they could get some shares without fear of any regulatory bodies coming after them. Regardless of how exposed and accepted Bitcoin will also be in the outside world, we are actually going to grow far more than we are today, and it's just a matter of time. Maybe in a decade from now, there will be much more people in the Bitcoin community than we could possibly imagine.

un_rank

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- Jay -

Quote from: Jating on July 01, 2023, 12:38:45 PM

Because some companies view bitcoin as not a good investment, simply as that. I remember watching a interview with a CEO of a transportation company that haul passengers, are afraid of bitcoin's volatility.

This is same with some people, they do not see Bitcoin as a safe investment and opt for less volatile options. There are also companies and even governments looking to get into bitcoin and there are more now than there was 5 years ago, and there would be more now than there would be in 5 to 10 years to come.

- Jay -

Jating

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Quote from: a298b112 on June 30, 2023, 09:38:17 AM

If I understood it correctly spot BTC ETF will allow institutional investors to but BTC, and hence a lot of people waiting spot BTC ETF to be approved. But then how come MicroStrategy is already heavily invested in BTC? Why they can buy it, while other institutional investors waiting for ETF?

Because some companies view bitcoin as not a good investment, simply as that. I remember watching a interview with a CEO of a transportation company that haul passengers, are afraid of bitcoin's volatility.

And maybe this is one of the biggest concerns by majority of the companies.

As opposed to Saylor who believes in bitcoin despite seeing the bear/bull market.

Joan of Arc official

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Some of you are confusing an institutional investor and a company. Both have different possibilities to invest in different markets, because both have different regulations/guidelines. A company is more free to invest in whatever they like. Not the same can be say with an institutional investor.

Quote from: BlackHatCoiner on June 30, 2023, 02:47:37 PM

I believe the company has trapped itself in a kind of DCA strategy to make up for last year's losses. (which must be in excess of 1 billion?).
So I don't know if they have any choice but to continue investing in BTC.

Husires

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Quote from: a298b112 on June 30, 2023, 09:38:17 AM

If I understood it correctly spot BTC ETF will allow institutional investors to but BTC, and hence a lot of people waiting spot BTC ETF to be approved. But then how come MicroStrategy is already heavily invested in BTC? Why they can buy it, while other institutional investors waiting for ETF?

MicroStrategy currently work as ETF proxy it is a good option for those who want to invest in Bitcoin indirectly and do not want to be directly exposed to Bitcoin and keep it in his portfolio, as he holds MicroStrategy shares aka MSTR, which do not invest in anything other than Bitcoin, and therefore it is as if he is investing in Bitcoin through a third party.

If the ETF is approved, this is a problem for MicroStrategy as it has lost its only advantage and they may stop buying.
this apply to GBTC

Quote from: fillippone on June 28, 2023, 04:13:00 PM

Be warned about the risky situation of Microstrategy.
Everyone is looking at Microstrategy as an "ETF proxy".
They are buying a lot of BTC, and investors have flocked to MSTR because of that.
In case of an ETF approval, Microstrategy would lose all those investors, as the ETF is such a more efficient way of holding BTC.
In case you want to bet on ETF approval: Long GBTC, short MSTR!

If you have any MicroStrategy ask it here MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’

Topic: Why MicroStrategy can buy BTC but not other institutions? (Read 371 times)