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

[JayJuanGee]

It could be said that this opportunity was available to everyone, but for some reason only MicroStrategy were able to take advantage of it.

I think part of Saylor's big scheme is to convince other companies to follow in his footsteps.
Some have already started, in small steps, following the same playbook as the “Bitcoin Magazine owned" firm Metaplanet in Japan, while others have made vague announcements.
As we often say: “Slowly at Start, then suddenly”

Ultimately, Saylor's/MSTR's approach has been quite genius in terms of making sure to be out there and really selling their strategy right from the start. So in that regard, everyone and anyone had chances to follow some similar version of the Saylor/MSTR playbook - even though surely hardly no public company would have had the ability to carry out the strategy in such a seemingly psycho way as Saylor/MSTR, partially based on the way that public companies tend to be set up with a bit more scattered control...

There have also been several areas in which some folks had considered that Saylor/MSTR had gotten overly leveraged in bitcoin, yet they had never gotten into places in which they did not have enough cashflow to service various debts that they had, so the kinds of leverage that they had tended to be fairly easy to service - with no real harsh terms.. but maybe there was a bit of luck too in terms of chosen custodians of bitcoin and chosen debt servicing relationships, since so many custodians and banks had issues in the 2022 collapses - and we did see some relatively BIG entities suffer extreme losses based on their chosen custodians and bank relations... 

I would be nervous if I were Saylor/MSTR if I were to have more than 50% of my holdings with ONLY 1 custodian, such as Coinbase, and so I continue to wonder how solid are whatever custodian arrangements that Saylor/MSTR has.. Oh yeah and by the way, Saylor has more liberty in regards to how to hold his personal stash, which seems to be at least more than 17k bitcoin that he announced publicly, and would imagine that he personally has more than 25k bitcoin since he had sold so many personal shares of MSTR last year-ish, and he's gotta put that value somewhere.

[fillippone]

<…>

If I remember correctly MicroStrategy uses Coinbase for order execution,yet custody I guess they do self custody.
No wallet has been tied to MicroStrategy, this leads me also to the self custody solution: they have more sofisticate way of assessing their balances rather than resorting to a single address to be monitored onchain.

[The Sceptical Chymist]

I'm surprised MSTR stock got split 10:1, just seeing as how so many other stocks don't seem to be splitting these days.  I know it's absolutely neutral as far as any statistics are concerned, but 20 years ago you wouldn't usually see a bunch of NASDAQ listings getting anywhere near $1k, which is what I'm observing not only with tech stocks but many others as well.

Didn't see any mention of the split in this thread, so I thought I'd bring it up. 

If I remember correctly MicroStrategy uses Coinbase for order execution,yet custody I guess they do self custody.

If it's true they keep their private keys off of Coinbase or wherever they trade, I'm curious as to how they keep them secure--not that I expect that to be revealed, of course; I'm just curious.  They've got a lot of bitcoin to keep an eye on.

[Poker Player]

I'm surprised MSTR stock got split 10:1, just seeing as how so many other stocks don't seem to be splitting these days.  I know it's absolutely neutral as far as any statistics are concerned, but 20 years ago you wouldn't usually see a bunch of NASDAQ listings getting anywhere near $1k, which is what I'm observing not only with tech stocks but many others as well.

Well, as you may know, they do it because there are many more people who can afford to buy a couple of $130 shares than $1,300, apart from the psychological effect that makes them look "cheaper" even though they are not.

I would be nervous if I were Saylor/MSTR if I were to have more than 50% of my holdings with ONLY 1 custodian, such as Coinbase, and so I continue to wonder how solid are whatever custodian arrangements that Saylor/MSTR has...

If I remember correctly MicroStrategy uses Coinbase for order execution,yet custody I guess they do self custody.
No wallet has been tied to MicroStrategy, this leads me also to the self custody solution: they have more sofisticate way of assessing their balances rather than resorting to a single address to be monitored onchain.

If it's true they keep their private keys off of Coinbase or wherever they trade, I'm curious as to how they keep them secure--not that I expect that to be revealed, of course; I'm just curious.  They've got a lot of bitcoin to keep an eye on.

Arkham Intelligence identifies MicroStrategy Bitcoin holdings pooled with Fidelity

Roughly 107,000 BTC of MicoStrategy’s holdings appeared pooled with Fidelity Custody, while 79,000 BTC was “held in segregated custody including Coinbase Prime.”

From our point of view as individual holders it is probably hard for us to see it, but for companies it makes more sense to have the Bitcoins in the custody of a company with a specialized custody service that they can sue if they lose them or something. Those services, apart from a lot of security measures, will have an insurance for those issues.

[JayJuanGee]

From our point of view as individual holders it is probably hard for us to see it, but for companies it makes more sense to have the Bitcoins in the custody of a company with a specialized custody service that they can sue if they lose them or something. Those services, apart from a lot of security measures, will have an insurance for those issues.

I have a certain level of doubt that whatever insurance that the various custodians supposedly have in place is anywhere close to adequate in terms of really covering the BTC that they hold, yet surely we likely appreciate that the insuring of bitcoin and the custodying of bitcoin and other kinds of digital assets (maybe including shitcoins) remains an evolving kind of a service that could end up playing out quite painfully if there really ended up being large scale disappearances of bitcoin holdings (or other ways that custodians might end up losing access to the coins that they are supposed to be holding). 

[Poker Player]

I have a certain level of doubt that whatever insurance that the various custodians supposedly have in place is anywhere close to adequate in terms of really covering the BTC that they hold, yet surely we likely appreciate that the insuring of bitcoin and the custodying of bitcoin and other kinds of digital assets (maybe including shitcoins) remains an evolving kind of a service that could end up playing out quite painfully if there really ended up being large scale disappearances of bitcoin holdings (or other ways that custodians might end up losing access to the coins that they are supposed to be holding). 

I don't know exactly how it is, but in the fund industry, both indexed and mutual, and this includes pension funds, they have a separate custody part and I don't remember there being any major problems with it. We are talking about quite a few trillions.

[JayJuanGee]

I have a certain level of doubt that whatever insurance that the various custodians supposedly have in place is anywhere close to adequate in terms of really covering the BTC that they hold, yet surely we likely appreciate that the insuring of bitcoin and the custodying of bitcoin and other kinds of digital assets (maybe including shitcoins) remains an evolving kind of a service that could end up playing out quite painfully if there really ended up being large scale disappearances of bitcoin holdings (or other ways that custodians might end up losing access to the coins that they are supposed to be holding). 

I don't know exactly how it is, but in the fund industry, both indexed and mutual, and this includes pension funds, they have a separate custody part and I don't remember there being any major problems with it. We are talking about quite a few trillions.

You might be correct in terms of an implication that there could be responsible ways of custodying bitcoin (and perhaps shitcoins too, to the extent that any of the "crypto assets" matter outside of bitcoin).    It seems that there are quite a few tools that are still being developed, and surely it could be the case that some custodians create their own tools and checks/balances to lessen the likelihood of losses (I would think that the risks could not be completely eliminated, and I think that there should be reasons to be worried.. and surely I am not claiming to be any kind of expert beyond being a bit scared on behalf of others - not that some of the losses through various 3rd party custodians would necessarily be reflected of the safeguards that might be taken with some of the current custodians... and yeah, I hear about all kinds of potential solutions that include multi-sig and multi-jurisdictional protections, yet I can hardly imagine if there might not be some potentially BIG incidents that might end up happening - and yeah sometimes there might be cover-up involved too, so we might not hear about "incidents" as they are happening.

[fillippone]

I have a certain level of doubt that whatever insurance that the various custodians supposedly have in place is anywhere close to adequate in terms of really covering the BTC that they hold, yet surely we likely appreciate that the insuring of bitcoin and the custodying of bitcoin and other kinds of digital assets (maybe including shitcoins) remains an evolving kind of a service that could end up playing out quite painfully if there really ended up being large scale disappearances of bitcoin holdings (or other ways that custodians might end up losing access to the coins that they are supposed to be holding). 

I don't know exactly how it is, but in the fund industry, both indexed and mutual, and this includes pension funds, they have a separate custody part and I don't remember there being any major problems with it. We are talking about quite a few trillions.

In the TradFi world, asset managers usually have a custodian agent, which is a third party in the agreement between the investor and the asset manager. Custody is a legacy, ol style. boring business, where scale economy does count. It's then so common for the market to have only a few custodians.

I think in the Bitcoin world we are going in the same direction, with custodian subjects separated from holders or asset managers.

[Yamane_Keto]

Despite Norway's opposition to Bitcoin, they have invested in Bitcoin by buying (Bitcoin proxy) MicroStrategy shares. Norwegian Central Bank and Swiss Central Bank have acquired over 1.5M shares of MicroStrategy.

🇳🇴 Norwegian Central Bank bought 1,123,930 shares of MicroStrategy

🇨🇭 Swiss Central Bank bought 466,000 shares of MicroStrategy

https://x.com/QuintenFrancois/status/1823687138111582672

Although it is good news, there does not seem to be a change in the anti-Bitcoin policies of Norway.

This is simply part of a physical index replication strategy which basically all very large institutional investors have and do. This has nothing to do with what many ppl in the comments see as an implied message that Norges or SNB is now bullish bitcoin or MSTR

https://x.com/patrick_saner/status/1823729882016440744

[fillippone]

Although it is good news, there does not seem to be a change in the anti-Bitcoin policies of Norway.

This is simply part of a physical index replication strategy which basically all very large institutional investors have and do. This has nothing to do with what many ppl in the comments see as an implied message that Norges or SNB is now bullish bitcoin or MSTR

https://x.com/patrick_saner/status/1823729882016440744

I was about to comment exactly like that.
Norway is one of the few nation-states to have a Public Fund to invest the pension funds of their citizen. They invest all over the world, trying to replicate the indexes. Hence, it is easy for them to buy every single stock in the world, basically (some are excluded for ethical reasons).
This is why they are long MSTR because they are long the SPX, so they have to buy each share in it.
No endorsement of Bitcoin in that.

[fillippone]

Not for the Faint of heart:

Defiance Debuts Leveraged 1.75x MicroStrategy ETF

Defiance ETFs has unveiled the Defiance Daily Target 1.75x Long MSTR ETF (MSTX), the first single-stock leveraged ETF tracking MicroStrategy, the technology company known for its massive bitcoin holdings.

The MSTX fund seeks to deliver 1.75 times the daily percentage change in MicroStrategy’s share price
<...>

Apparently, they wanted a 2x exposure, but the SEC deemed it too high.

Fun thing, this is safer play to MSTR than putting 1.75 times the capital, du to a short convexity Payoff.

[ginsan]

Not for the Faint of heart:

Defiance Debuts Leveraged 1.75x MicroStrategy ETF

Defiance ETFs has unveiled the Defiance Daily Target 1.75x Long MSTR ETF (MSTX), the first single-stock leveraged ETF tracking MicroStrategy, the technology company known for its massive bitcoin holdings.

The MSTX fund seeks to deliver 1.75 times the daily percentage change in MicroStrategy’s share price
<...>

Apparently, they wanted a 2x exposure, but the SEC deemed it too high.

Fun thing, this is safer play to MSTR than putting 1.75 times the capital, du to a short convexity Payoff.

Saylor is truly a genius, he went without a hitch, $MSTX saw $22m in volume today, which may be a Day One record for a leveraged ETF. Even the second day jumped $34m.





The South Korean government seems to be on a buying spree. The National Pension Service (NPS), the third-largest public pension fund in the world, purchased $34 million or 46 billion won worth of shares in MicroStrategy (MSTR).


source

source

[fillippone]

Today I made a spreadsheet combining the ratio of enterprise value over the Bitcoin valuation, and the number of satoshi per share.
Interestingly, while the ratio was generally going up, even if it had some drawdown, the number of Satoshi per shares is an up only, even accounting for convertible bonds (fully diluted). Very nice property of MSTR shares.

[JayJuanGee]

Not for the Faint of heart:
Defiance Debuts Leveraged 1.75x MicroStrategy ETF

Defiance ETFs has unveiled the Defiance Daily Target 1.75x Long MSTR ETF (MSTX), the first single-stock leveraged ETF tracking MicroStrategy, the technology company known for its massive bitcoin holdings.

The MSTX fund seeks to deliver 1.75 times the daily percentage change in MicroStrategy’s share price
<...>

Apparently, they wanted a 2x exposure, but the SEC deemed it too high.

Fun thing, this is safer play to MSTR than putting 1.75 times the capital, du to a short convexity Payoff.

Saylor is truly a genius, he went without a hitch, $MSTX saw $22m in volume today, which may be a Day One record for a leveraged ETF. Even the second day jumped $34m.

I am a little bit confused by the first half of your post ginsan since even the initial link by fillippone describes the MSTR ticker as being launched by Defiance, which is a separate company from Saylor and/or MSTR.

Another article that I saw asserts that MSTX is the first leveraged single-stock ETF.. and surely these kinds of products can be confusing, to the extent that any  of us might want to get price exposure to bitcoin and/or to MSTR through that kind of a new way of looking at the matter.. and surely even if Saylor/MSTR is not behind the MSTX product, they had inspired such extra layer of trading gambling.

[fillippone]

<...>

I am a little bit confused by the first half of your post ginsan since even the initial link by fillippone describes the MSTR ticker as being launched by Defiance, which is a separate company from Saylor and/or MSTR.

MSTR is the ticker for the Stock
MSTX is the leveraged ETF launched by Defiance.
MSTR or Salyor have nothing to do with MSTX trading, nor can the Microstrategy share be directly impacted by MSTX success, at least in a direct way.
Maybe MSTR can benefit from the huge success of MSTX in case of a bullish market, but it's pure speculation based on the wiring of this MSTX fund.

[AirtelBuzz]

One of the biggest owners of Bitcoin is American entrepreneur Michael Saylor. He owns a lot of Bitcoin through his company MicroStrategy and his company is constantly buying Bitcoins. Today we also saw that his organization or company purchased $1.11 billion worth of Bitcoins. We have seen that the Bitcoin market took a rough shape in September 2024 yet this company continues their Bitcoin hoarding strategy.


Microstrategy bought 18,300 additional bitcoins worth $1.11 billion.
https://x.com/saylor/status/1834564555944481227?t=ZAdzhuuzhkZXVYe2EjgW6g&s=19

[DiMarxist]

Snip

The total acquired Bitcoin of Microstrategy is estimated to be 244,800 Bitcoin which is one of the highest Bitcoin hodlers in the Bitcoin investment. And the way I look at it they are using the sudden decreased of Bitcoin price to purchase more and at the time of purchase was Aug. 6 and Sept. 12 and the price of Bitcoin in August 6, 2024 was $56,002.99 and in September 12 was 56,771.43.
And when you look at it well, he bought it at the same price and only small fraction differences. And that is a calculative purchase or investment of Bitcoin.

[ginsan]

Snip

The total acquired Bitcoin of Microstrategy is estimated to be 244,800 Bitcoin which is one of the highest Bitcoin hodlers in the Bitcoin investment. And the way I look at it they are using the sudden decreased of Bitcoin price to purchase more and at the time of purchase was Aug. 6 and Sept. 12 and the price of Bitcoin in August 6, 2024 was $56,002.99 and in September 12 was 56,771.43.
And when you look at it well, he bought it at the same price and only small fraction differences. And that is a calculative purchase or investment of Bitcoin.

Even I think Saylor and Microstrategy don't care about the price when they buy Bitcoin. If they get money they will continue to buy Bitcoin.



source

Microstrategy's BTC holdings are 1.17% of the Bitcoin supply, Well I assume they will pursue btc holdings to 2% of the bitcoin supply by the end of this year. That would be a pretty wise move if they continue to buy then the price of bitcoin will increase more drastically by the end of this year.



source

Now microstrategy sits in 6th place below Grayscale which is in 5th place with holdings of 263,801 BTC.

[JayJuanGee]

Snip

The total acquired Bitcoin of Microstrategy is estimated to be 244,800 Bitcoin which is one of the highest Bitcoin hodlers in the Bitcoin investment. And the way I look at it they are using the sudden decreased of Bitcoin price to purchase more and at the time of purchase was Aug. 6 and Sept. 12 and the price of Bitcoin in August 6, 2024 was $56,002.99 and in September 12 was 56,771.43.
And when you look at it well, he bought it at the same price and only small fraction differences. And that is a calculative purchase or investment of Bitcoin.

People talk the bullshit about Saylor buying the dip all of the time, and the truth of the matter is that Saylor is buying at whatever the BTC price happens to be when he has the cash available to buy (like ginsan mentioned too), so if you read the little blurb above, such blurb already shows that Saylor was buying at an average of $60,408.. sure a bit of a dip as compared to where the BTC price was in late August but not really seeming to be buying on the dip as you proclaim but instead more of a dollar cost averaging approach to be buying at whatever the BTC price happens to be when the cash is available to him.

[Mate2237]

Snip

The total acquired Bitcoin of Microstrategy is estimated to be 244,800 Bitcoin which is one of the highest Bitcoin hodlers in the Bitcoin investment. And the way I look at it they are using the sudden decreased of Bitcoin price to purchase more and at the time of purchase was Aug. 6 and Sept. 12 and the price of Bitcoin in August 6, 2024 was $56,002.99 and in September 12 was 56,771.43.
And when you look at it well, he bought it at the same price and only small fraction differences. And that is a calculative purchase or investment of Bitcoin.

People talk the bullshit about Saylor buying the dip all of the time, and the truth of the matter is that Saylor is buying at whatever the BTC price happens to be when he has the cash available to buy (like ginsan mentioned too), so if you read the little blurb above, such blurb already shows that Saylor was buying at an average of $60,408.. sure a bit of a dip as compared to where the BTC price was in late August but not really seeming to be buying on the dip as you proclaim but instead more of a dollar cost averaging approach to be buying at whatever the BTC price happens to be when the cash is available to him.

Yes I agreed with you. Saylor buys at anytime whenever there is Cash available in his hand. The two time he bought bitcoin as of August and September were the same price range of  ($56,002.99 and 56,771.43), and it looks like he bought when the price his coming down. And as you said the $60,408 has also come down compared to the time when Bitcoin was at $68k and $70k. And from the way he buys, probably he is using DCA approach which is good to acculturate more. Every investor would like to buy at the dip either slide dip or deep dip.

And Saylor bought at all time depending on the availability of the funds.