Bitcoin Forum

Some time ago I bought some shares of Microstrategy. The reason was that I had other stocks and mutual funds and I wanted to own shares of some company that was heavily exposed to Bitcoin.

After buying them, I sometimes doubt if I did the right thing. On the one hand there are those who say that to buy MSTR shares, you better buy Bitcoin directly and that's it. But on the other hand, there are those who say that since MSTR is a company that takes on a lot of debt to buy Bitcoin, it can bring higher potential profits.

So far it seems to have gone well for Saylor:


Earlier today it emerged that he has bought more Bitcoin:


It looks like he's not going to stop buying every last penny (funny):


Do you think it was a good idea to buy a few shares? I guess it would be stupid if I had bought only MSTR shares and didn't have any Bitcoin, but having Bitcoin (and I keep buying), I guess it's not such a bad idea.

If you hold on to it in the long-term, I think that you did the right thing of buying some shares in Microstrategy, I mean you didn't do anything wrong buying a good stock, is it a dividend paying one though because that can affect how worth it buying those shares.

Hi mate, no, it doesn't pay dividends: -"MSTR does not currently pay a dividend"

Source: https://stocknews.com/stock/MSTR/dividends/

This is common in these types of technology companies but the return you can get from capital appreciation is much higher than dividend-paying blue-chips.

Higher (or at least different types of) risk too. MSTR can go down for any number of reasons not related to Bitcoin or even to their business performance, e.g. an accounting scandal or general market meltdown.

Plus there's what I'd call a "nocoiner's fee" - since MSTR stock can be bought by entities that are unable to buy Bitcoin directly (mutual funds etc), the price likely includes a demand-induced premium. It may or may not work in your favor in the long run. For example if a Bitcoin ETF becomes available, MSTR stock price might lose that premium.

Having said that, it's done well so far. As long as you're comfortable with it - good luck.

My advice would be to be careful about your diversification.  If you're holding Bitcoin already, and then your brokerage account is full of shares of MicroStrategy & Coinbase, then you're more or less putting all of your eggs in one basket.  MicroStrategy is basically a leveraged Bitcoin play at this point and for most people who don't have Bitcoin exposure, is probably a good addition to a portfolio.  Just don't forget to be exposed to all other investment types as well.  Bitcoin is cool and might be the best investment still by a long shot, but diversification will make your life much more care free.

It's not a bad idea. Considering the growth in value, owning shares in Microsoft is a shrewd approach with potential for good ROI.
I'll only advice you look beyond your personal reason for investing, which is to buy a currency heavily exposed to bitcoin. Each investment has its unique qualities and the purpose of the project, that, in my opinion, should be your motivation to acquire it and not the secondary aspect of an investment.

Unfortunately, I don't think that it's a great idea.

Essentially you are getting the worst of both worlds here. You are now subject to the illiquidity and the regulatory oversight of the fiat economy, whilst still having to cop bitcoin's volatility.

In fact, there is pretty much no way that MSTR is going to trade at NAV because of the investment vehicle structure. Investors would only be able to realise their total investment if the company for whatever reason decides to dump all their coins. Not worth.

What if MicroStrategy will tomorrow announce that they decided to dump Bitcoin and invest in some shitcoin instead? There's many examples of a change of heart in crypto industry, latest being Tesla, before that there were people like Roger Ver who were once huge Bitcoin proponents but later turned into enemies.

If you want to have something with performance tied to Bitcoin but with more profit/risk, why not just buy leveraged Bitcoin?

I don't find any good reason for buying MicroStrategy stocks because they got Bitcoin on their Balance Sheet. MicroStrategy stocks are far different from just buying Bitcoin.
You should buy MicroStrategy stocks for other reasons too, not just because they hold Bitcoin too. If I will answer the question of buying MicroStrategy stock instead of Bitcoin, I'll go buying Bitcoin alone because it's where I believe on. And for me, it's risk that they are on debt just to buy more Bitcoin.

I wouldn't do it if I were you. If the goal is diversification then after you bought bitcoin you should buy things that are not being affected by bitcoin price. It is the same arguments about buying altcoins, why buy something that could crash hard?
Not to mention that there is another scenario that happens to all big companies. If someone hacked MicroStrategy's cold storage and stole 80% of their total coins. The company's stock would tank hard, it may even disappear as they file for bankruptcy.

As for the profit, I seriously doubt that this company's stock can keep up with bitcoin price rise. It may match it now or even be pumped higher at times, but in the long run it won't keep up.

If you think you're underweight in bitcoin and have no other way of purchasing BTC rathen than have exposure through MSTR, then it's probably reasonable. But assuming that you have money in stocks for the sole reason to diversify your portfolio a bit, then probably a bad idea? Unless your plan in the first place was to go really really heavy on bitcoin, which I personally don't recommend, but in the end it's your money.

To be honest, I don't like this type of diversifying, it's like you go long in oil and invest in Exxon shares, and in this case MSTR carries a lot of risks and I don't see why would they bring higher potential profits from since they're only buying bitcoin, nothing else that's more spectacular or that would outperform your own buys not forgetting the fact that they have their own expenses on top of that. And the risks are far higher, the company can land itself into trouble, from legal stuff to hacks to stupid decisions, a crazy dump triggered by god knows what even like we've seen back in last April would send them near bankruptcy with their exposure, on the other hand, the bitcoins you held yourself will be still yours no matter what.

In my opinion, I would leave buying shares to the ones that can't buy BTC directly, and that's not the case here.


Yeah, but shares of Microsoft were not tied to the value of a windows license, nor did I see a w95 serial number getting traded for $50k this weekend with the possibility of getting even more valuable in ten years..

I can't really say if it's good or not, except that if you're buying shares, then you better hope you're legally protected. I know a lot of people buy "shares" on apps these days and it's not even a real share, or a real app, just again numbers on an account that you hope will be honored by people when you want to sell.

I honestly don't see how it's better than BTC:)

Oh man, I think it's a terrible idea.

Of course, the best is to buy the orange coin itself and hodl your private keys.
The second best is to buy the orange coin and make some professional custodian hodl your keys.
The third best is but some structured product that efficiently tracks the price of bitcoin. Something like GBTC, but better. I don't know exactly where are you from, but something like BTCE (learn more here: ETC Group to launch bitcoin ETP on Deutsche Boerse (https://bitcointalk.org/index.php?topic=5254380)).
The fourth best is GBTC, now trading at a hefty discount on the secondary market.
The fifth best is buying something vaguely related to BTC; as MSTR.

Where does this chart come from? Adding complexity levels. As @suchmoon suggested. Going down from the simple, direct buy, to the fifth, you are adding layers of unnecessary complexity. All those complexities come at an unnecessary cost, and those costs are positively correlated with risks, in a weird subpar way.
MSTR is not an investment vehicle, you are basically trusting Micheal Saylor (who I reckon has been adamant on his bitcoin choices now, but has done questionable things in the past) about his investment plan. But a lot of things can go wrong for MicroStrategy, the firm, and impact your BTC exposure.

I think I made similar points on my thread in the past:

MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’ (https://bitcointalk.org/index.php?topic=5268108)

You should have read more carefully!


Having said that, hope the best for you and your investment!

Or this other “next best” Bitcoin-connected investment, buy and HODL some Coinbase stock. COIN? Its volatility is not highly correlated with the volatility of Bitcoin, and you might collect the rewards of the stock’s surge if the whole market/shitcoins surge.

Totally agree with your analysis, although I am a fan of blue chip stocks, I can see where you're getting at. My goal is to get a big passive income as much as I can so I am a fan of blue chip.

I guess I do not see any difference between them at this point. Microstrategy is a company that keeps on buying bitcoin and that's it, there is nothing else to it and they will profit when the bitcoin price is up and they will lose when the bitcoin price is down, that is literally the only thing they are doing right now.

There is no difference between that and buying bitcoin, because if you bought bitcoin you would lose when it went down and earn when it went up as well. All in all they are not a crook company like most other major places neither and hold so much bitcoin as well hence making a profit for them is not that hard neither. I would say that you did nothing out of ordinary, I can't say it is good, I can't say it is bad, it is just neutral to having bitcoin of your own, and that is why it is not a bad idea for sure, but can't say if it is good neither.

Exactly.

You're essentially buying an illusion. MSTR has no obligations to neither hold the coins or distribute the coins to their shareholders at any stage.

If they don't pay dividends, liquidate their assets and do a stock buyback, how is the stockholder ever going to see the value of their investment go up even in BTC bull markets? It's simply a really bad tracker for BTC price if you're trying to gain exposure to the markets.

If bitcoin goes up, the stock should go up simply because of the increase of value of their treasury. Take a look at the BTC/USD vs MSTR/USD chart, both assets are really correlated simply due to the reason I've mentioned.


But yea, I definitely prefer holding "real" bitcoin for the long-term.

When it comes to stocks, there really isn't much to buy out there. Everything is overpriced. Except new IPOs like DASH or COINBASE and you still have no idea how much is a fair price to pay. When coinbase launched it opened at $380 and peaked at $420 and it seemed like $400 was a good buy and it would head to $1000 in a few years. However its $250 now and went under $200 almost for a while. Sure its not a crypto coin and its a business that makes profits however it took a big hit when BTC crashed.

Same with DASH it opened at like $200 and went to $100 for a while and now its almost back at $200. Its hard to value these IPOs. And all the other stocks like TSLA, GOOG, AAPL are all overvalued currently. So there is not much to buy. MSTR is not bad as long as they don't sell the coins. And if it goes to a new ATH and they buy more on debt it'll obviously go up higher in terms of %'s rather than buying the coin itself.

I know your thread and I have commented on it, what happens is that I have not read the entire 25 pages of the thread, I guess what you comment was in some of the pages I did not read.

Anyway, I would like to point out to some of you catastrophists that I have not bought MSTR shares instead of buying Bitcoin. When I did that it was because I used to buy stocks from the stock market and instead of buying P&G, for example, I decided to buy from a company that had exposure to Bitcoin.

It seems that you have not understood it well or I do not know if I have not emphasized it well: I have Bitcoin that I keep in a hardware wallet and I keep buying regularly. I added 0.01 BTC yesterday for example, as I commented on the WO thread. So most of my investment is in Bitcoin directly and I have the private keys.

I think I am going to put this in the OP, so people don't get confused.

Mate, you're taking people's answers a bit too seriously. :P

The main sort of 'criticism' was sort of like "why buy MSTR if you can buy BTC?". But maybe you have an excuse on why you couldn't easily pull out your fiat from the broker to your bank account so you could buy actual bitcoin. If you did have a reason, then maybe it makes your decision justified. But in the end, we readers don't know. Hence why a lot of times it pays to be really detailed on your reasoning as to prevent those answers that you aren't looking for.

I mean it’s not a bad idea but I don’t see why you didn’t just buy bitcoin dude. Microstrategy shares clearly depend heavily on the price & performance of bitcoin so why not cut out the middle man.

I doubt anyone that was criticizing the move made that assumption or thought you had sold your coins for MSTR shares, everyone was wondering why buying shares when you could have bought bitcoins.
And the thing that instead of buying shares in a random company you decided to buy shares in micro is not really making sense, you could have simply cut your stocks acquisition budget in half and use half of that money to again buy bitcoin if you weren't sure in which company to invest.

It would have been different if micro would have any other kind of bitcoin-related activity so you could say they would profit more from crypto on top of their holding but that is not happening, as mk4 pointed out in that graph the only thing that brings the shares up is BTC, so, what's really the point of buying?
I would have understood buying 10k of HSBC instead of depositing 10k in a bank account but with MSTR, unless they launch some kind of additional generating revenue, no it doesn't


It shouldn't be that correlated but it still is, if you're willing to take risks, some mining companies like Riot performed better during the dump on Wednesday night.

Ah, yes, I am a catastrophist.
I see MSTR as a good investment for those who cannot access the real BTC markets for another reason. This adds a layer of complexity to the investment thesis, and the extra yield granted by this complexity (leverage) doesn't seem enough to me.

So, yes, stacking sats is still the best option.
But as I said, I wish the best for your investment! I am rooting for you!

@Poker Player, I don't see anything wrong with you buying any stocks, much less those that have had very good growth. We can now discuss whether it would be better if you invested that money directly in BTC, but I don't see that it makes too much sense - because you can always sell shares and buy BTC or something else.

I always say "your money, your decision what to do with it" ;)

In light of the latest responses, I will explain why for me it was a separate thing to buy bitcoin/buy stocks.


Now I only buy Bitcoin. I don't invest in anything else. I used to also contribute to an S&P 500 fund and buy stocks, as I say in that quote. I guess until not too long ago I didn't quite believe that Bitcoin is the most profitable asset on planet earth. When I came to believe it, I stopped investing in anything else and just kept buying Bitcoin.

For me they were separate things, but I was doing them at the same time and regularly: contributing to the S&P 500, buying stocks and buying Bitcoin.

I suppose that investing in MSTR was the previous step, as they were the last shares I bought.

It was a change in mentality from thinking that Bitcoin was a good investment, but better to diversify, to thinking that it was the best investment and therefore not worth diversifying and better to only invest in Bitcoin.



I am rather going to call you a:


 ;)


I guess the only point is to add a bit of leverage.

Bitcoin is the best investment choice for anyone who believes in its future potential. If Microstrategy can buy a lot because they believe in bitcoin, why should we doubt it? Actually I really wanted to answer your question about "Did I do the right thing? I bought shares of MicroStrategy", but I think people have answered it well enough for you. The point is that you will decide where your money can make a profit for yourself.

You have done the right thing and it is not documented that you only need to invest in bitcoin and leave other sources of investment.But we must choose the investment that gives us return in future not diminishing ones.Buying stock is also good option and MSTR shares have shown some drastic growth over these years and leveraging bitcoins and making profits both way.So you are on the right path.But as you already know if you talk about crypto market then bitcoin is the only best option available with us in all terms like prices, profits, security and complete decentralisation so don't need to invest in any shitcoins in the market.

Speaking up of Michael Saylor we can expect him to take huge debts also to buy bitcoins as MicroStrategy has already acquired $177 million of bitcoin the past day and now company has and has more than 100k bitcoins at $2.7 Billion approximately at average price of $26k approx by doing DCA investment and what a smart move on his part.This year bottom was also at $28k from $64k but they have acquired more at lower than it.

Talking about MSTR shares they have skyrocketed more than 600% from july only and those who have invested in it have gained profits out of it.Having profits out of our investment is goal so we all do such preference investment.