MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’

[JayJuanGee]

each, when he
<...>
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.

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.

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?

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.

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.

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[Hueristic]

each, when he
<...>
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.

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.

Many Maximilists just do not comprehend this issue.

Maybe you should start a thread?

[Hueristic]

 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?
...

By definition holding reserves precludes them from speculation. BTC is THE manner in which those reserves are held which means they cannot be speculated with so if there was dumping going on in the background Saylor would be Criminally liable. That is the difference that means you cannot correlate the two.

[Lucius]

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 can say with great certainty that the video was created in 2014 because there was one upload of the same video that year, but it was deleted over time. Draper made an identical statement that was released on September 12, 2014.

“I guess the markets aren’t seeing what I am seeing. An entire economy is being rebuilt. I have a price target of $10,000 in three years. Even that may be pessimistic.”

On September 23, 2014, Draper told Fox Business that he predicted that one bitcoin would reach $10,000 "in three years"; on January 27, 2015, Draper wagered about $400,000 (which is 2000 bitcoins with $200 price) that the bitcoin will rebound from a recent plunge. The price of a bitcoin crossed $10,000 on November 29, 2017.]

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.

Draper actually lend some of that BTC to start-up Vaurum after the auction, but I haven't been able to find out exactly what the amounts are - so it's unclear how much Draper kept and how much he invested. Although in the years after that purchase (as well as today) he was of the opinion that he did not want to sell BTC because he considered it something much better than fiat currency.

[gentlemand]

https://twitter.com/SquareIR/status/1314190152663617536#

Square have just put 1.8% of their cash into BTC too. One of the less surprising ones of course but still, 50 million dollars thrown at it isn't to be sniffed at.

[fillippone]

Microstrategy added a whole page on their Corporate Website, dedicated to Bitcoin and their investment thesis:

https://www.microstrategy.com/en/bitcoin

It's packed with interviews, papers articles and other documents on their investment and on bitcoin in general.

Definitely worth a read, if you want to consider the reasons why they decided to walk that way.

[gentlemand]

https://www.coindesk.com/nydig-raises-50-million

Stone Ridge Holdings Group, whoever the hell they are, has 10,000 BTC that they're referring to as their 'primary treasury reserve asset'.

I wonder how many there are yet to out themselves.

[JayJuanGee]

Microstrategy added a whole page on their Corporate Website, dedicated to Bitcoin and their investment thesis:

https://www.microstrategy.com/en/bitcoin

It's packed with interviews, papers articles and other documents on their investment and on bitcoin in general.

Definitely worth a read, if you want to consider the reasons why they decided to walk that way.

Today, Peter Mccormack posted a 1 hour 43 minute Podcast (What Bitcoin Did) interview with Saylor, in which (at about minute 25) Mccormack asked Saylor what he thought about funding bitcoin development, and Saylor seemed convinced that funding a developer would be a good idea... so during such interview, Saylor seemed to have decided during that his company would be funding a bitcoin developer in the near future... a good interview overall.. with a bit of breaking news, at the same time.    

[Karartma1]

Microstrategy added a whole page on their Corporate Website, dedicated to Bitcoin and their investment thesis:

https://www.microstrategy.com/en/bitcoin

It's packed with interviews, papers articles and other documents on their investment and on bitcoin in general.

Definitely worth a read, if you want to consider the reasons why they decided to walk that way.

Today, Peter Mccormack posted a 1 hour 43 minute Podcast (What Bitcoin Did) interview with Saylor, in which (at about minute 25) Mccormack asked Saylor what he thought about funding bitcoin development, and Saylor seemed convinced that funding a developer would be a good idea... so during such interview, Saylor seemed to have decided during that his company would be funding a bitcoin developer in the near future... a good interview overall.. with a bit of breaking news, at the same time.    

Yes, JJG! Excellent podcast. I still can't believe this is happening for real. My take is that every sane individual, after having put a bit of time, passion and dedication into bitcoin, can not dismiss it as nerd money. This is the most important technological breakthrough of our lives and, listening to the podcast, I am actually so proud of myself having spent all that time studying bitcoin while everyone around me kept telling me to stop wasting my time.
I went a bit long but the option of funding bitcoin developers reminds me of what is happening to Linux. You still have free, open source Linux distros and applications while big enterprises are making big money thanks to it.

[goldade]

No doubt this is a huge news for the crypto community. Like I used to say, it is only a matter of time before bitcoin gets wholly adopted in the mainstream world.
I read some days ago that Square, another company, bought bitcoins worth $50 million and just a few days later, this is also coming through.
I believe that for a company to pump $250 million into bitcoin, it shows the tangibility of bitcoin and it's advantages over fiat.
Trust me, at this rate, in some two or three years, bitcoin's adoption would be almost throughout the entire world

[Lucius]

I believe that for a company to pump $250 million into bitcoin, it shows the tangibility of bitcoin and it's advantages over fiat.
Trust me, at this rate, in some two or three years, bitcoin's adoption would be almost throughout the entire world

In fact, it is a total of $425 million that MicroStrategy invested in the purchase of BTC, and the first transaction was $250 million. There is no doubt that such large companies influence others by their example, and every week we have at least one new company that publicly announces that it has bought thousands of BTC. It will be interesting to see how the situation develops in the coming months, whether the trend will continue in the sense that other companies will want some of the digital gold for themselves.

[gentlemand]

Today, Peter Mccormack posted a 1 hour 43 minute Podcast (What Bitcoin Did) interview with Saylor, in which (at about minute 25) Mccormack asked Saylor what he thought about funding bitcoin development, and Saylor seemed convinced that funding a developer would be a good idea... so during such interview, Saylor seemed to have decided during that his company would be funding a bitcoin developer in the near future... a good interview overall.. with a bit of breaking news, at the same time.    

I think at this point he's mainly enjoying being feted by a new group of people. Expect him to open his novelty t shirt and mug store any second now to extend his honeymoon. The real test is when it falls through the floor. It may of course end its fall at a price that's way higher than where it is now.

[gentlemand]

https://www.coindesk.com/uk-listed-firm-mode-putting-10-of-cash-reserves-into-bitcoin

Mode Global Holdings PLC, a UK fintech company, has stuck 10% of their cashola in. No mention of figures so 10% might be £100. They're citing lack of returns on cash as a major factor. They did an IPO a couple of weeks ago so maybe want to keep the greed rolling longer.

[fillippone]

https://www.coindesk.com/uk-listed-firm-mode-putting-10-of-cash-reserves-into-bitcoin

Mode Global Holdings PLC, a UK fintech company, has stuck 10% of their cashola in. No mention of figures so 10% might be £100. They're citing lack of returns on cash as a major factor. They did an IPO a couple of weeks ago so maybe want to keep the greed rolling longer.

Agree. Researching for my Bitcoin treasuries thread I saw some few companies reporting Bitcoin Holding just for the sake of it.
Is a 100 BTC reserve worth making the world aware of? Certainly, as it is a very effective marketing stunt.
Is a 100 BTC reserve worth tracking? I don’t think so.

So pinch of salt when reading those announcements.

[fillippone]

How much a Bitcoin Company Microstrategy is?
Well: it seems a lot!
According to the spreadsheet we are at 30%.



 
But this tweet puts it on a different perspective:

Microstrategy has earned $78 million in the last 3.5 years from their business operations.

Microstrategy has earned $100 million in the last 2 months from their Bitcoin purchases.

🚀

https://twitter.com/kerooke/status/1321137199585394695?s=20

Of course they are happy about this, and they are going to try the trick again:

MicroStrategy Is Looking to Buy More Bitcoin, President Says

MicroStrategy is looking to add to its $521 million stash of bitcoin, the company’s president said Tuesday during the business intelligence firm’s earnings conference call.

MicroStrategy President Phong LiBesides the 22% return on its BTC investment, the company has seen another benefit from its foray into cryptocurrency – increased visibility. “We’ve seen a notable and unexpected benefit from our investment in bitcoin in elevating the profile of the company in the broader market, Li said. “This is benefitting our reputation overall, raising our mindshare among prospective customers.”

Of course the reputation of the company is very high, but I see a very high correlation with price.
This means they must be ready to see some volatility there.

[Fortify]

It's nice to see more wholesale investment in Bitcoin and it is bound to be good for the long term price, however they are effectively taking a gamble on this like everyone else. Hopefully more companies diversify their assets into Bitcoin, now it has the support of Paypal it seems much easier for the general population to get hold of it and store it securely. People love chasing the next big thing and it looks like Bitcoin is back in favor.

[Harlot]

Like from what I have said in the past firms jumping in the Bitcoin train is a double-edged sword, for one it can really attract a lot of attention for other people to follow and invest in Bitcoin as well as it will give Bitcoin a recognition to the investing community the downside of this is of course a company this big which as of now has 250 million dollars in Bitcoin and is reportedly still buying is considered to be a whale and a capital this big can bring the market down once they hit the sell button. Remember that they have this as an alternative for their cash reserve and cash reserves are meant to be liquidated so anytime the company sees it fit they can always sell all of it at once.

[fillippone]

Wow apparently Micheal Saylor is a real Bitcoin Bull!!

Some have asked how much #BTC I own.
I personally #hodl 17,732 BTC which I bought at $9,882 each on average. I informed MicroStrategy of these holdings before the company decided to buy #bitcoin for itself.

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


That was a 175,250,000 USD investment, already up (considering 13,200 BTC USD@13,200) 34% and worth 234,000,000 USD!
While reading this tweet anyway remember he hodl also the 75% of voting rights in Microstrategy. So, yes he aut-informed his firm about his hodlings and then auto voted the buy.

Guessing how this tweet will age...

[gentlemand]

You certainly can't deny his balls deepness. I wonder what a private poll of all of Microstrategy's staff and investors would come up with if asked how they felt about it.

We may find out he's been detained against his will when he attends every board meeting wearing a UASF baseball cap and forms a mob attacking nocoiners.

[fillippone]

The Wall Street Journal has released an article on MicroStrategy's foray into cryptocurrency
<...>

As MicroStrategy themselves said, their investment in bitcoin influenced their recognition and added publicity to them. They write about them everywhere.

I was literally reading the article, and adding  to the thread, when you posted.

As you said, not only the investment was important to keep the company afloat resorting to hard money, but also proved as an exceptional marketing stunt. Full page on the WSJ is something I can't figure out how could have been attained by MicroStrategy (without another Michael Saylor Fraud, of course).

Anyway I inserted this article, together with some other interesting finding surfaced on the thread, to the OP.