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

[Donneski]

Source link: https://x.com/i/status/2053807998993150151


Michael Saylor has purchased 535 Bitcoins this week using $43 million, although the amount of Bitcoin purchases this week is less than other weeks, but they have maintained the continuity of purchases. With the addition of 535 Bitcoins, they are now holding 818869 Bitcoins, they have purchased Bitcoins using MSTR and STRC shares.
They have only 181131 Bitcoins left to complete their one million Bitcoins. However, they will be able to collect these Bitcoins in the future in a few months by maintaining a regular and consistent purchase of Bitcoins.

While many of us are celebrating every MicroStrategy buy, it seems we're not thinking about the long-term implications of just one company aggresively moving to owning a million BTC. Don't get me wrong, I'm bullish on Bitcoin but it seems we're avoiding the concentration risk discussion.

I'm not saying this because I fear that Saylor might control bitcoin in the future but because I know that having a big influence in the market is completely different from having a control over the network.

That said, I think there's something about the future of Bitcoin that only Saylor probably knows, reason why he's been triggered to keep finding capital even after years of non-stop buying. Wether we like it or not, he's aggressively become the most commited accumulator of the current cycle.

[ultrloa]

Source link: https://x.com/i/status/2053807998993150151


Michael Saylor has purchased 535 Bitcoins this week using $43 million, although the amount of Bitcoin purchases this week is less than other weeks, but they have maintained the continuity of purchases. With the addition of 535 Bitcoins, they are now holding 818869 Bitcoins, they have purchased Bitcoins using MSTR and STRC shares.
They have only 181131 Bitcoins left to complete their one million Bitcoins. However, they will be able to collect these Bitcoins in the future in a few months by maintaining a regular and consistent purchase of Bitcoins.

While many of us are celebrating every MicroStrategy buy, it seems we're not thinking about the long-term implications of just one company aggresively moving to owning a million BTC. Don't get me wrong, I'm bullish on Bitcoin but it seems we're avoiding the concentration risk discussion.

I'm not saying this because I fear that Saylor might control bitcoin in the future but because I know that having a big influence in the market is completely different from having a control over the network.

That said, I think there's something about the future of Bitcoin that only Saylor probably knows, reason why he's been triggered to keep finding capital even after years of non-stop buying. Wether we like it or not, he's aggressively become the most commited accumulator of the current cycle.

I understand that concern since this is also what we need to consider. Those actions done by MicroStrategy posses risk, but they don't have full control of the network. What they can only do is to influence those people following them.

Even if they are holding close to millions of BTC, these institution can't change the reality that Bitcoin is a decentralize coins in nature.

What they can do temporarily is to affect the sentiments of investors, then those effect is will not lost long. Because just like other bad new and manipulative act occur or happen before.

That accumulation done by Strategy shows their conviction towards holding Bitcoin for long time. But also we should understand that the resilience of Bitcoin does not rely only on single entities holding this coin, because Bitcoin is more bigger than those institutions.

[BlackHatCoiner]

I will admit that the "sell for what?" comment is hilarious.

Yes, I agree that this sudden switch in behavior is concerning. However, I have two questions:

• Hasn't Saylor already sold at least once bitcoin in the past?
• Why was he forced to sell now? I thought he keeps $2 billion+ in stock exactly for being consistent with his liabilities.

[Ambatman]

I will admit that the "sell for what?" comment is hilarious.

Yes, I agree that this sudden switch in behavior is concerning. However, I have two questions:

• Hasn't Saylor already sold at least once bitcoin in the past?
• Why was he forced to sell now? I thought he keeps $2 billion+ in stock exactly for being consistent with his liabilities.

Not that we aware of. Since we just believe what we told without any proof of reserve.
And on the issue of selling
I believe they planning to let people know that selling isn't off the table (phong stated same last year)
So it would be easier and have lesser impact when they do sell after pre informing investors.
It's like reminding them that bitcoin is a liquid treasury asset that can be use if necessary.

The drop from $100K might have given them a wake up call that anything can happen
If they short of fund there's ATM and STRC though they have limit to how much they can help.


And he isn't selling now. Just letting people know that it is possible.
They have no reason to sell now especially with the performance on Q2
Cash reserve and maturity of debt is till 2028
Dividends can be covered with the performance they are having for the past weeks.

[Taskford]

I will admit that the "sell for what?" comment is hilarious.

Yes, I agree that this sudden switch in behavior is concerning. However, I have two questions:

• Hasn't Saylor already sold at least once bitcoin in the past?
• Why was he forced to sell now? I thought he keeps $2 billion+ in stock exactly for being consistent with his liabilities.

Yes they sold small part of their holdings before and say they do that for tax reasons.

It is that deferred tax asset  not a change of heart that explains Saylor’s openness to selling. The same move was made before. On Dec. 22, 2022, Strategy sold 704 BTC at $16,776 per coin and repurchased 810 BTC two days later in a tax-loss harvesting maneuver designed to carry capital losses back against prior gains. The structure now is larger, but the logic is identical.

They also tackled up the recent and past  action to be done by Strategy here https://bitcoinmagazine.com/news/strategy-mstr-buys-43-million-more-bitcoin

With this it shows that those selling is not new and they eventually they accumulate later on to recover.

[Abelly]

Source link: https://x.com/i/status/2053807998993150151


Michael Saylor has purchased 535 Bitcoins this week using $43 million, although the amount of Bitcoin purchases this week is less than other weeks, but they have maintained the continuity of purchases. With the addition of 535 Bitcoins, they are now holding 818869 Bitcoins, they have purchased Bitcoins using MSTR and STRC shares.
They have only 181131 Bitcoins left to complete their one million Bitcoins. However, they will be able to collect these Bitcoins in the future in a few months by maintaining a regular and consistent purchase of Bitcoins.

While many of us are celebrating every MicroStrategy buy, it seems we're not thinking about the long-term implications of just one company aggresively moving to owning a million BTC. Don't get me wrong, I'm bullish on Bitcoin but it seems we're avoiding the concentration risk discussion.

I'm not saying this because I fear that Saylor might control bitcoin in the future but because I know that having a big influence in the market is completely different from having a control over the network.

That said, I think there's something about the future of Bitcoin that only Saylor probably knows, reason why he's been triggered to keep finding capital even after years of non-stop buying. Wether we like it or not, he's aggressively become the most commited accumulator of the current cycle.

In Bitcoin large ownership and network control are not the same thing. Even if a company deposits millions of bitcoins, they cannot change the consensus rules, because it depends on the collective participation of node operators, miners, developers, and the entire market. Rather, there is another side to large corporate purchases. It signals long term confidence in the market and increases institutional acceptance. However, there is no way to completely eliminate the risk of centralized holdings because excessively large positions can affect market liquidity and short term price behavior in the future The strength of Bitcoin lies in the fact that no individual, Company, or state, no matter how large the holder, sets the rules of the network. Decentralized participation is not a balance sheet.

[Bluedrem]

While many of us are celebrating every MicroStrategy buy, it seems we're not thinking about the long-term implications of just one company aggresively moving to owning a million BTC. Don't get me wrong, I'm bullish on Bitcoin but it seems we're avoiding the concentration risk discussion.

I'm not saying this because I fear that Saylor might control bitcoin in the future but because I know that having a big influence in the market is completely different from having a control over the network.

That said, I think there's something about the future of Bitcoin that only Saylor probably knows, reason why he's been triggered to keep finding capital even after years of non-stop buying. Wether we like it or not, he's aggressively become the most commited accumulator of the current cycle.

This is a reasonable discussion. Yes, when a single person or group holds the majority of an asset, the question of the decentralization of decentralized Bitcoin can arise. When a person holds a large amount of Bitcoin, many decisions they make about Bitcoin can cause major changes in the market.
For example, imagine what the market situation would be like if Michael Saylor decided to sell a unit of Bitcoin in his collection. I think the market would go down a lot, even for a short time. Although the shareholders of MicroStrategy will not let Saylor sell Bitcoin so easily, because if he sells Bitcoin, the share price will also fall overnight.
However, I think that if the amount of Bitcoin is spread among many people in many wallets, rather than being too much for one person, it will stabilize it and its volatility will be expressed in real terms.

[boumalo]

He goes into debt to buy BTC, which is risky but the core SaaS business makes 500m$/y, debt 10B$, BTC holdings 60B$.

[Ambatman]

While many of us are celebrating every MicroStrategy buy, it seems we're not thinking about the long-term implications of just one company aggresively moving to owning a million BTC. Don't get me wrong, I'm bullish on Bitcoin but it seems we're avoiding the concentration risk discussion.

Well The good thing is Bitcoin isn't POS where how much of the coin you own matters alot
And people celebrate the buy because it shows that an institution still believe in involving in Bitcoin
And it usually translates to higher adoption
And in turn make Bitcoin more legal I'm the eyes of the public
But like all good things, attract tighter regulation.

think there's something about the future of Bitcoin that only Saylor probably knows, reason why he's been triggered to keep finding capital even after years of non-stop buying

So he's like Bitcoin Jesus?
He buys because he needs to
Buying improve investors confidence
And in turn give then reason to buy his share
Which in turn translate to more money.
It's business nothing really mysterious.

[Free Market Capitalist]

He goes into debt to buy BTC, which is risky but the core SaaS business makes 500m$/y, debt 10B$, BTC holdings 60B$.

The core Software Business Intelligence is negligible and could be spinned-off but Saylor doesn't want to. The Bitcoin Treasury side of the business is what the company is about nowadays. At first, they bought Bitcoin with the profits from the BIS, and they still do so from time to time, but it’s almost nothing compared to what they raise through Bitcoin treasury operations.

[fillippone]

The week has ended: this is the forecast by strc.live



They assign 50% of the volume above par to bitcoin buying.
I am a little bit more aggressive than that.
I assign all the proceeds of STRC sales above 100 toward bitcoin buying, save the needed cash to maintain the dividend reserves at 24 months.
This would imply something more around 24,000 Bitcoins.
Huge, even if not record inflows.

[Free Market Capitalist]

If anyone wants to watch a debate on the potential sustainability of products like STRC and Bitcoin treasury companies, here’s one:
 
Is $MSTR a Scam? ft. Coffeezilla

Previously, Coffeezilla had made a video warning of the potential risks, and in this debate he faces off against Jeff Walton, a sharp guy who serves as Chief Risk Officer at Strive, and who, as I learned during the debate, has launched a product similar to STRC but which pays 13% annually instead of 11.5%. 

Overall, both hold their own; it’s clear that Coffeezilla has done his homework, has watched plenty of Saylor’s videos, and warns of potential risks from the perspective of someone who isn’t a Bitcoin maximalist but believes it’s an asset that’s here to stay—though it has passed its peak in terms of profitability. In his view, Bitcoin has followed an S-curve of profitability, but we’re already at the peak, where returns have flattened out and will keep that way. On the contrary, Walton is more in line with Saylor; he’s a total Bitcoin maximalist, and I think he defends his arguments well—except for one. He sticks to Bitcoin’s projected 30% CAGR, something Saylor hasn’t even mentioned for a while. Ever since Saylor formulated that hypothesis—which, let’s remember, was based on a 50% rate in the early years dropping to 20% within 20 years, leaving an average of 30%—Bitcoin’s returns have been absolute shit, hovering around 0% or minimal CAGR, depending on the timeframe. That’s why, even though Walton has defended himself well, I think it’s a mistake that he’s become so fixated on defending that 30% CAGR going forward.

[fillippone]

I think it’s a mistake that he’s become so fixated on defending that 30% CAGR going forward.

How can you defend a fixed CAGR, this implies bitcoin being an asset deemed to go parabolic sooner or later.
I think a more reasonable approach is to just think that Bitcoin will continue to grow, but with diminishing returns. At least this is the hypothesis of the “Bitcoin Power Law”.

[nikola22]

Strategy plans to repurchase $1.5 billion worth of debt at a discount and listed bitcoin sales as a potential funding source.

The company entered into privately negotiated transactions with zero-coupon convertible note holders on May 14, with settlement expected on or about May 19, according to an 8-K filed with the SEC. In the deal, Strategy would pay approximately $1.38 billion total, retiring the debt at roughly 92 cents on the dollar. The notes were originally due in 2029.  Strategy cited three potential funding sources for the buyback, including available cash reserves, proceeds from its at-the-market equity offering programs, and proceeds from the sale of bitcoin.

https://www.theblock.co/post/401482/strategy-to-retire-1-5-billion-in-convertible-notes-at-a-discount-may-sell-bitcoin-to-fund-buyback

there is a chance that Strategy would sell some BTC to repurchase debt but I think they will use equity offering programs rather than selling BTC.