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

[JayJuanGee]

Is this Jeffries, LLC?  If so, they look like an investment banking company, and I guess I'm missing the connection with the "ATM facility" tag.  Can anyone clarify that for me?  Are they involved with BTCATMs or does that refer to something different?

Either way, I guess I shouldn't be surprised that MSTR bought more bitcoin since it looks like they're going to be doing the DCA thing in perpetuity (or until they think they have enough). 

Despite every purchase of BTC by MSTR, the price does not soar when Amazon issues vacancies and false assumptions in the community about the implementation of BTC on Amazon

Wait, what?  I'm not sure what you mean about the Amazon part of your post.  I don't think Amazon was responsible for those rumors that they'd soon be accepting bitcoin--they'd have no reason to do that IMO.  And as far as bitcoin not soaring: it's at around $49k, so I think it's starting to take off.  If and when it breaks through the $50k barrier, it'll be a straight shot to a new ATH.

I cannot resist to make some kind of comment regarding what sometimes can seem like short term perspectives in regards to where the BTC price is at or where it might be going... and for sure, I am not referring to you, The Pharmacist, because you seem to appreciate that we are in an upward momentum for the moment.

What I am suggesting is that so frequently there will be emphasis in terms of some recent price movements of the past days or even a week or so that get all worked up that the latest local high has not been busted through - as if BTC price goes up in a straight line, which is kind of ridiculous way of thinking.

Largely we have about a 70% price bounce back from our sub $30k prices of just a month ago, and for sure there could be some pauses, and even a correction from our current price point.. and surely at each stage in the past month-ish, when BTC prices were getting into the upper $30ks, and then into the lower $40ks and getting above $46k and bouncing above $50k - getting above each of those BTC price thresholds brought higher levels of certainty that the $28,600 bottom was in, and not about BTC prices continuing to go UPpity...

Sure, in the medium to long term, and including our current BTC price momentum, we seem poised for continuing UPpity, but of course nothing is guaranteed and not even that there could be a BTC price correction at this time - and so far, we have only had a 6% correction (down $47,750 so far), which seems to be a BIG so what.. kind of ant price movements, in the whole scheme of things.   

When he buy Bitcoin total market is impact I don't know why market is down now.after some day he buy some bitcoin market go down.

Maybe this post is demonstrating part of my point?

The BTC price is NOT down.. Zoom the fuck out..

The BTC price is up, and what do you expect?  Straight up forever?  no corrections?  6%?  What is 6% in the scheme of things?       seemingly nada...

To be honest I do not like that someone holding so much BTC that they can create panic in the BTC market so easily. This is not good for crypto in the long term. I am just thinking about how much the market will be affected by a "profit booking" tweet from Michele saylor. Some individuals will hold so much power we could see misuse of it very often in the future.

You shouldn't have let him buy that much then. You should have bought it yourself until it's sold out so no one else can buy.

But hey, it's a free market. Anyone can buy bitcoins.

However, it is very unlikely that they will do any "profit booking" anytime soon. All their coins are locked up for at least 5 years.

MSTR's coins (and Saylor's personal stash as well) are not exactly "locked up", but I otherwise agree with the overall sentiment of your post Dabs and your various other points including that MSTR nor Saylor are likely to be either selling or attempting to be manipulating the BTC price, even if they are capable of doing whatever the fuck they want - in terms of free market aspects of bitcoin (but of course, there would likely be concerns from some regulatory bodies (such as SEC - and even share holder concerns) if Saylor were to try any kind of significant or meaningful levels of selling stocks to buy lower kinds of things).

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[fillippone]

Is this Jeffries, LLC?  If so, they look like an investment banking company, and I guess I'm missing the connection with the "ATM facility" tag.  Can anyone clarify that for me?  Are they involved with BTCATMs or does that refer to something different?

I knew that this would have come out.
Actually, ATM facility is not related to Automated Teller Machines, rather than to At The Market Issuance.

It is a mechanism announced back in June and somehow it didn't make to this thread!


MicroStrategy Launches “At the Market” Securities Offering for Flexibility to Sell Up to $1 Billion of its Class A Common Stock Over Time Form S-3 | June 14, 2021

Basically, MicroSstrategy decided to raise capital offering up to USD 1,000,000,000 through the sale of shares. They are collecting the capital, vs issuing new shares in an equal dollar amount, at market price. The proceeds of these new sales can then be used to buy more bitcoins.
This is the first declaration of such a use of this facility, to finance the purchase of 117,000,000 worth of Bitcoins. I guess they will have to periodically disclose the issued amounts.

The details of the issuance can be found here

[The Sceptical Chymist]

for sure, I am not referring to you, The Pharmacist, because you seem to appreciate that we are in an upward momentum for the moment.

What I am suggesting is that so frequently there will be emphasis in terms of some recent price movements of the past days or even a week or so that get all worked up that the latest local high has not been busted through - as if BTC price goes up in a straight line, which is kind of ridiculous way of thinking.

Oh, I've been into bitcoin long enough not to get excited about extreme jumps or drops and have come to expect both in short time frames--and I know damn well bitcoin only goes up in a straight line for a finite amount of time before it drops.  Long before bitcoin came along I was a stock market junkie, so I'm used to looking at price charts.  Bitcoin sort of acts like a pink sheet stock in terms of volatility as opposed to a blue chip stock.

I knew that this would have come out.
Actually, ATM facility is not related to Automated Teller Machines, rather than to At The Market Issuance.

Ah, OK.  I appreciate you clarifying that for me and anyone else who didn't know what that meant.  I haven't been following MSTR's business dealings at all, and I don't even watch their stock price (though it's in my watchlist) except for times when I reference it for purposes of posting in this thread.

[fr4nkthetank]

So if I get this correctly the shareholders are diluted 2.5%, but the company has 3.5% more bitcoin in it

[Dabs]

MSTR's coins (and Saylor's personal stash as well) are not exactly "locked up", but I otherwise agree with the overall sentiment of your post Dabs and your various other points including that MSTR nor Saylor are likely to be either selling or attempting to be manipulating the BTC price, even if they are capable of doing whatever the fuck they want - in terms of free market aspects of bitcoin (but of course, there would likely be concerns from some regulatory bodies (such as SEC - and even share holder concerns) if Saylor were to try any kind of significant or meaningful levels of selling stocks to buy lower kinds of things).

His personal stash, maybe he can do whatever he wants with those, but I am guessing he has those under multi-sig and it will just be a hassle for him to actually do it.

The company stash, it's also very likely to be multi-sig with the board members, and the whole company has to agree. Maybe he has more signatures, but I'm almost sure he needs at least one more other person if it's set up correctly. There may possibly be a last resort backup plan like buried in some high security vault.

Maybe? We are just speculating. Imagine that one dude who has hardware wallets all over the planet and he's just a family man.

Most of these guys have their own "castles" ... I mean houses, or office buildings, with adequate physical security. If you had an actual gold bar, you could safely store your bitcoin paper wallet in the same place. Multi-sig would just require more than one of these safe places.

Also quite possible that Saylor has all the keys anyway, so he can still control all the bitcoin of the company all by himself, I'm still pretty sure it's in some form of multi-sig either case.

How do you think he stores his bitcoin? 18k BTC personal stash, and company coins 108k BTC ... ... You have that much, better put they keys in some building with armed guards. Be your own bank. Literally.

[Lucius]

How do you think he stores his bitcoin? 18k BTC personal stash, and company coins 108k BTC ... ... You have that much, better put they keys in some building with armed guards. Be your own bank. Literally.

If we know the way they invest in BTC, and that is through Coinbase - then it is logical to conclude that they use Coinbase Custody as a way to store their digital assets. Personally, I don't know that Saylor ever posted anything about it, but I don't believe that he or anyone else from his company keeps any private keys, seeds or has direct access to the place where that BTC is kept.

In addition CC provides insurance for the funds it keeps, although I’m not sure up to what percentage.

[Dabs]

I think Saylor has mentioned that they took control of the coins, and withdrew from the exchange, and they are doing self-custody. With the seminars and other info he has put up, it seems likely they know how to do it themselves. I have not been able to look at all his presentations, but I've heard enough from youtube interviews and podcasts that I'm inclined to believe he knows how to do it personally, as most any other rocket scientists should be able to do.

But, like you, I've not seen any confirmation of that. I think he mentioned it, don't remember or know where. Maybe someone should ask him directly.

Edit: "Michael Saylor: We Custody Our Bitcoin And Do Not Lend It Out"
https://bitcoinmagazine.com/business/michael-saylor-bitcoin-interview-etf-think-tank
https://www.youtube.com/watch?v=WkJNRSCeZ7E

I haven't seen the whole video yet, going to do that soon.

[JayJuanGee]

MSTR's coins (and Saylor's personal stash as well) are not exactly "locked up", but I otherwise agree with the overall sentiment of your post Dabs and your various other points including that MSTR nor Saylor are likely to be either selling or attempting to be manipulating the BTC price, even if they are capable of doing whatever the fuck they want - in terms of free market aspects of bitcoin (but of course, there would likely be concerns from some regulatory bodies (such as SEC - and even share holder concerns) if Saylor were to try any kind of significant or meaningful levels of selling stocks to buy lower kinds of things).

His personal stash, maybe he can do whatever he wants with those, but I am guessing he has those under multi-sig and it will just be a hassle for him to actually do it.

The company stash, it's also very likely to be multi-sig with the board members, and the whole company has to agree. Maybe he has more signatures, but I'm almost sure he needs at least one more other person if it's set up correctly. There may possibly be a last resort backup plan like buried in some high security vault.

I doubt that anyone with controlling shares of a relatively medium sized company is going to set up funds in such a way that removes his ability to be able to decide the direction of the funds, just like he has such same authority to decide the direction of the company's assets and time spent on projects.  Sure, there are both aspects of fund management and company directional decisions that are allowed to happen without his input in the hands of various designated leaders, but at the same time, those actions of spending company funds or resources would NOT be out of Saylor's reach to control, if he wanted.

In other words, MSTR is not any usual company in regards to how much control Saylor has, and he neither has given it up nor would it be logical to assume that he is planning to give up such control anytime in the near future.

Maybe? We are just speculating.

You were presuming that MSTR funds are locked up, and I don't think so.  Sure there may well be procedures to follow to sell or spend them, but I doubt that they are locked up in anywhere close to the "5-year" proclamation that you had made... So I would say that you are the one speculating about something that does not seem to be backed up by facts that go beyond such speculation and the actual facts/logic don't really support anywhere close to such "locked up for 5 years" speculation that you made.

By the way, I will agree that:
1) MSTR/Saylor has created a number of debt instruments that need to be serviced over the next 4-7 years
2) Saylor seems to understand the bitcoin 4 year cycles, and he likely had invested ways that account for the 4 year cycles
3) Even though Saylor is a majority shareholder, minority shareholders have rights of disclosure (to stay apprised of material and significant operational/financial decisions
4) Saylor made pretty strong statements that he does not plan to sell for 100 years.. blah blah blah

None of the above locks Saylor into having to hold for 5 years.. In other words, he can do whatever he wants in spite of the points - so long as he does not violate any minority shareholder rights by failing/refusing to disclose material and significant information along the way regarding what he is doing.  Sure, his own statements do lock himself up somewhat to reveal if he has changed his position, but those statements would not be any kind of absolute lock on his ability to sell substantial amounts of company bitcoin before 5 years.

Imagine that one dude who has hardware wallets all over the planet and he's just a family man.

Most of these guys have their own "castles" ... I mean houses, or office buildings, with adequate physical security. If you had an actual gold bar, you could safely store your bitcoin paper wallet in the same place. Multi-sig would just require more than one of these safe places.

Also quite possible that Saylor has all the keys anyway, so he can still control all the bitcoin of the company all by himself, I'm still pretty sure it's in some form of multi-sig either case.

How do you think he stores his bitcoin? 18k BTC personal stash, and company coins 108k BTC ... ... You have that much, better put they keys in some building with armed guards. Be your own bank. Literally.

Sure, method of storage might cause some delays in getting access to either the BTC of MSTR or even Saylor's own personal stash, and for sure, neither of us seem to be suggesting that Saylor has any limitations in terms of spending his own stash, and you were the one asserting MSTR coins were locked up for 5 years, and the best you could come up with for such assertion is multi-sig.. that makes little sense.  Like I already mentioned, I doubt that they are going to create multi-sig obstacles that lock up their coins for anything beyond various company prudences and security, which is not 5 years, and it seems to me that your assertion that MSTR coins  are locked up for 5 years is just purely wrong, even if MSTR/Saylor has said that he his not selling his BTC for 100 years.. blah blah blah (based on his age, he's lucky if he lives even another 40 years).. he still could sell, if he wanted to and made the proper disclosures.

Don't get me wrong, I am not even asserting that Saylor is likely to sell his or his company's BTC anytime soon, and I am mostly of the belief that he will not sell his (or MSTR) BTC any time soon - within this cycle; however, choosing NOT to sell BTC is not the same as being locked into not being able to sell.. and I believe that he is able to sell his BTC (or his company's BTC), but he likely will not.

[fillippone]

I think Saylor has mentioned that they took control of the coins, and withdrew from the exchange, and they are doing self-custody. With the seminars and other info he has put up, it seems likely they know how to do it themselves. I have not been able to look at all his presentations, but I've heard enough from youtube interviews and podcasts that I'm inclined to believe he knows how to do it personally, as most any other rocket scientists should be able to do.

But, like you, I've not seen any confirmation of that. I think he mentioned it, don't remember or know where. Maybe someone should ask him directly.

Edit: "Michael Saylor: We Custody Our Bitcoin And Do Not Lend It Out"
https://bitcoinmagazine.com/business/michael-saylor-bitcoin-interview-etf-think-tank
https://www.youtube.com/watch?v=WkJNRSCeZ7E

I haven't seen the whole video yet, going to do that soon.

I think this is a bold move by Saylor.
One thing is being technically able to do self-custody. Another is doing it safely, with appropriate insurances, and with robust, industry-state of the art standards.

Given the amount of BTC they have, I don't think self custody is the best option. But for sure they know it better than me.
 

[Dabs]

Yes, true on all accounts. We don't know how they are doing it, we are just speculating on how it is.

Multi-sig still seems to make the most sense, even for individuals, you have more than one way to access the wallet and it can't be done on a single machine, at the same time you can have backups and distribute the keys geographically. Plus all of them can be kept offline. Cold storage. You can also plan for inheritance, which is probably required for corporations as it's going to be a big problem if he gets hit by a bus and no one else knows how to access the coins.

Most billionaires or millionaires should have access to more than one domicile. Have more than one house. Or access to office spaces or buildings.

My own wallets are all in cold storage. Since I don't own multiple houses, it's all here with me, just physically separate from my normal work desktop computer. (My family does have another house, but it's in another country, and it's kinda hard to get to it now, so doing that kind of security will work but it's a hassle for me right now.)

Anyone who holds a significant amount of bitcoin would do well to research at least cold storage and multi-sig.

[Timelord2067]

The price of bitcoin has been correcting downwards the last few days wiping thousands off of the price of individual bitcoins and with it Billions of dollars off of investors bottom lines.

Any shock pushing the price upwards (such as the recent purchase by MicroStrategy) is now being counter-measured by a realization that investors simply aren't there to continue to prop up bitcoin's bottom line.  (Just look to how few transactions are showing up in the mempool).

[JayJuanGee]

The price of bitcoin has been correcting downwards the last few days wiping thousands off of the price of individual bitcoins and with it Billions of dollars off of investors bottom lines.

Any shock pushing the price upwards (such as the recent purchase by MicroStrategy) is now being counter-measured by a realization that investors simply aren't there to continue to prop up bitcoin's bottom line.  (Just look to how few transactions are showing up in the mempool).

Oh gosh Timelord.. you really believe that we are in some kind of a meaningful and significant trend that lacks upward support?

Sure we had more than a 70% price increase from the local bottom of $28,600 to $50,562, so getting some pausing or even an 8% pullback down to $46,309 in the past 36 hours should not be considered anything to write home to mom about.  In other words, your thoughts of downity seem a bit over prognosticated, but hey.., you do you in terms of your BTC price expectations.

[Daltonik]

The chairman and CEO of MicroStrategy, Michael Saylor, plans to spend $ 30 on September 7 to buy bitcoin in support of its implementation in El Salvador, thus taking part in the promotion offered on reddit. https://www.reddit.com/r/Bitcoin/comments/phgtq2/so_we_all_buying_30_worth_of_bitcoin_on_tuesday/

[fillippone]

The chairman and CEO of MicroStrategy, Michael Saylor, plans to spend $ 30 on September 7 to buy bitcoin in support of its implementation in El Salvador, thus taking part in the promotion offered on reddit. https://www.reddit.com/r/Bitcoin/comments/phgtq2/so_we_all_buying_30_worth_of_bitcoin_on_tuesday/

This is slightly OT, but I second this initiative. We all should signal our support to El Salvador stance in calling Bitocoin the ultimate Store of  Value.

[JayJuanGee]

The chairman and CEO of MicroStrategy, Michael Saylor, plans to spend $ 30 on September 7 to buy bitcoin in support of its implementation in El Salvador, thus taking part in the promotion offered on reddit. https://www.reddit.com/r/Bitcoin/comments/phgtq2/so_we_all_buying_30_worth_of_bitcoin_on_tuesday/

Of course, I am in support of buying $30 worth of bitcoin at whatever is the price on Tuesday, September at 2pm Pacific time, and personally, I am planning to buy $30 in every single account that I have that 1) has dollars in it or 2) a link to a bank account for dollars or 3) some other way of having $30 available for the purchase of BTC without having to sell BTC in order to make such $30 available.    

It seems that I have 6 accounts that currently meet my own criteria, and I had three accounts that I had been actively using on a fairly regular basis so they have no issues in regards to making sure that they are set to go and I can market buy $30 worth of BTC at or around the time of the concerted effort.

So of course, tentatively I am thinking that my BTC purchases are going to be $30 x 6 = $180 - unless I find some other ways that I either have already set up, I can easily set up or I want to go through the process of setting up some new ways to make some additional $30 BTC purchases.  

By the way on the three less active BTC related accounts that I currently have, I did make $50 test transactions on each of them in the past few days in order to ensure that I would feel comfortable that they work sufficiently and I will be able to immediately buy the $30 worth of BTC on Tuesday at the designated time.  .. so my extra BTC purchases in preparation for this concerted symbolic and supportive play is anticipated to be $150 (already spent) + $180 (the transactions that I will do on Tuesday at around 2pm pacific time) = $330 worth of extra BTC.

This is slightly OT, but I second this initiative. We all should signal our support to El Salvador stance in calling Bitocoin the ultimate Store of  Value.

Technically, you may well be correct.. perhaps?  perhaps?.. but that assertion of what might be considered "OT" seems to be a quite narrow definition of what would be "on/off topic" for this particular thread.

Consider a narrow definition of this thread to be that MSTR made some BTC purchases in July/August 2020.. and they had been undergoing a kind of ideological transformation in favor of the holding of significant quantities of bitcoin in their treasuries.. .... and that would be pretty damned narrow, no?  because it seems to me that MSTR started out with a kind of base newbie ideology for institutions to potentially justify the accumulation of BTC and even sort of implying that simular strategies may well apply to rich individuals too.. and then even further suggesting that such BTC accumulation/holding/hedging strategies might well be good for normies too... and even if we might have proclaimed that MSTR and sailor were really new to bitcoinlandia, Saylor/MSTR seemed to have been a kind of "holy shit" he figured out the value proposition way the hell quicker than some BTC HODLers who had been in bitcoin for 8-10 years, and even some of those long term BTC HODLers seemed to understand the value propositions of BTC way less than MSTR/Saylor.

Then there has been a kind of ongoing activism coming out of the camp of MSTR/Saylor that pushes the ideas of bitcoin upon the population in a variety of ways, including giving playbook strategies to the BIGGER players who may well have been hesitant to get into bitcoin because they claimed to NOT know how to do it, how to get started, how to maintain it or even how to think about what the fuck is the value proposition of bitcoin.   

Even if the magnitude of the $30 purchasing of BTC comes off as  kind of smaller scale, it seems to really stick to the Bitcoin education theme, including having considerable potentiality to end up leading more folks to both BTC and other kinds of teachings that MSTR/Saylor had been involved in - in the past 13 months-ish.

Label me as an off topic deviant if you would like, but I consider MSTR/Saylor's promotion of the $30 synchronized purchase campaign in support of El Salvador to have largely been on a very similar topic of this thread.

[Daltonik]

Michael Saylor's strategy regarding the commitment to bitcoin apparently caused anger in the S&P Dow Jones Indices, they decided to make the following adjustments to the S&P 500, S&P MidCap 400 and S&P SmallCap 600 indices, including MicroStrategy Inc.which will be removed from the S&P SmallCap 600. The changes will take effect before the opening of trading on Monday, September 20, 2021, to coincide with the quarterly rebalancing: Healthcare Services Group will replace $MSTR MicroStrategy Inc. in the S&P SmallCap 600. MicroStrategy is no longer suitable for the S&P SmallCap 600, as well as United Insurance Holdings, according to a press release from S&P Dow Jones Indices. https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20210903-1443045/1443045_sept2021-546-shuf-rebal.pdf

[jakdanyel]

I agree that cryptocurrencies are superior to cash in some ways by all means. However, the volatile nature of these currencies hinders them from being the global currency in the future also. Governments would rather using fiat forever than making a volatile currency their main currency. Of course fiat won't exist forever but you got what I meant. Governments can't trust a currency which is highly volatile. It might be a big hit to the economy in the long run.

[JayJuanGee]

I agree that cryptocurrencies are superior to cash in some ways by all means. However, the volatile nature of these currencies hinders them from being the global currency in the future also. Governments would rather using fiat forever than making a volatile currency their main currency. Of course fiat won't exist forever but you got what I meant. Governments can't trust a currency which is highly volatile. It might be a big hit to the economy in the long run.

You do not seem to understand the points that you are attempting to make - at least in the context of the subject matter of this thread, if that is what you were trying to do?

For your info, in spite of the potentially misleading thread title, in this thread (when referring to what Microstrategy is doing and their focus) we are talking about bitcoin here, not "cryptocurrencies"  so hopefully, you at least understand that level of distinction in terms of whatever point(s) you were wanting to make.

[paxmao]

 I am recently observing that there is a bitcoin linking effect in any company that somehow has something to do with bitcoin at a sufficient scale. For example, grayscale or microstrategy are shitty investment vehicles and companies, however their price is fully linked to bitcoin. Also, coinbase, which should be linked to fees, clients and level of trade, is also quite linked in its moves to bitcoin. To be honest, if I were and investor, I would rather have the original rather than a proxy.

[Timelord2067]

Oh gosh Timelord.. you really believe that we are in some kind of a meaningful and significant trend that lacks upward support?

Sure we had more than a 70% price increase from the local bottom of $28,600 to $50,562, so getting some pausing or even an 8% pullback down to $46,309 in the past 36 hours should not be considered anything to write home to mom about.  In other words, your thoughts of downity seem a bit over prognosticated, but hey.., you do you in terms of your BTC price expectations.

To be honest, I can't recall why I was writing that the price was going down - I know I wrote three or four items over that week about the lack-luster price as Bitcoin had stagnated somewhat.  However, the price has been on the up and up with the price again trending upwards.  No doubt someone in a few weeks time will ask why I wrote that.

If anything, it seems as though news of MicroStrategy's bulk buy has lifted people's confidence in BTC (much like the car salesman's push a few weeks back) and we're being moved out to the launch pad for liftoff any day now.