Bitcoin Treasuries

[fillippone]

3iQ’s Bitcoin Fund Seeks to Sell up to 1M Unit on Canadian Exchange
The fund managed by 3iq is selling up to 1,050,000 Class A units to raise approximately C$25.2 million or roughly

https://www.financemagnates.com/cryptocurrency/news/3iqs-bitcoin-fund-seeks-to-sell-up-to-1m-unit-on-canadian-exchange/

There is a lot of space in the market for this kind of products. BTC E in Europe and this 3iQ in Canada are trying to gain market share providing fairer fees products, in the ultimate interest of their clients, rather than providing an elaborated management fee collecting scheme, like, I’m sure you did get the reference, Grayscale.
I bet both this instruments will se massive money inflows.

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[erikoy]

I saw a good returns for those who invested in bitcoin. It is just that when investing in bitcoin there should be a good practice so that one will not get losses. Bigger money invested to bitcoin requires bigger patience too. When buying bitcoin it should be that bitcoin should be in lower price and the wait for some time to earn that even it could go for a couple of years and not getting emotional when bitcoin market is not good. Remember that time will come bitcoin market will come kicking just like to what happen now with the bitcoin market.

[JayJuanGee]

It is also a private choice for each company as well, there is nothing that stops them from showing how much bitcoin they have neither. I do not mean showing as a proof in a blockhchain wallet signed with their code so that we would know they actually own it, that is not required for many institutional investor because it is not really a big deal for them.

I mean showing as in actually writing the amount of bitcoin in the financial statement at the end of the year, there is nothing stopping them from doing that if they want to, they could also ignore it and just write something else and try to go around the subject if they want to as well. However I feel like most of them already talked about how much they bought and how much they made, so I assume some of them would definitely give exact bitcoin numbers as well while others will probably stay away from that.

Public companies have obligations to disclose some of these kinds of matters and to do it, publicly.

Private companies have little to no incentive.  It's like a private person disclosing how much BTC they own, and it would not seem like a very good idea.

O.k.  davinchi.. you first.  Prove your point by disclosing how much BTC you own...

Of course, if you own very little.. such as less than .5 BTC, then you might be more inclined to disclosed..  The more you own, the more likely you would prefer to be private.  There are reasons that richer people tend to want to have some privacy with the level of their wealth.. and maybe with bitcoin there will be greater incentives to be private for private individuals... but of course, there will be some people who might choose to be open, though I would still proclaim that they would be more of an exception rather than any kind of best practices.

[tbterryboy]

Square is becoming one of the biggest and easiest place to buy bitcoin and I feel like paypal will get there very soon as well. By the fourth quarter ends (with new year starting) we are going to see both square keep breaking their records but on top of that we are going to see some huge numbers from paypal as well.

I am not going to lie I have always found buying bitcoin as something very simple, I just send deposit from my bank account to my exchange and buy bitcoins with it, quite simple method that I never really found hard, however from the looks of square and paypal and how awesome they are doing and how much they changed our world, I could say that buying bitcoin wasn't something this simple for millions of people out there and these companies adding bitcoin purchase option opened bitcoin up to a lot more new people.

[jaysabi]

Square is becoming one of the biggest and easiest place to buy bitcoin and I feel like paypal will get there very soon as well. By the fourth quarter ends (with new year starting) we are going to see both square keep breaking their records but on top of that we are going to see some huge numbers from paypal as well.

I am not going to lie I have always found buying bitcoin as something very simple, I just send deposit from my bank account to my exchange and buy bitcoins with it, quite simple method that I never really found hard, however from the looks of square and paypal and how awesome they are doing and how much they changed our world, I could say that buying bitcoin wasn't something this simple for millions of people out there and these companies adding bitcoin purchase option opened bitcoin up to a lot more new people.

With PayPal, you're not able to transfer btc off the platform or use it to pay for anything.  Is the Square app similar like that or are you able to transfer what you buy on the app to outside wallets? Buying without being able to actually use or transfer doesn't seem very useful.

[acquafredda]

There is also another way to see the whole Bitcoin Treasuries story which is as follows

598K #BTC that can be seized by the US Government.

I don't like this.

— Theta Seek (@thetaseek) October 12, 2020

https://twitter.com/thetaseek/status/1315542217071550465

These Bitcoin Treasuries in Public Companies may well be seized by the government. Although Theat Seek comments were met with some amount of speculation, the current lack of complete regulatory clarity leaves this door open for further worrying.

[fillippone]

There is also another way to see the whole Bitcoin Treasuries story which is as follows

598K #BTC that can be seized by the US Government.

I don't like this.

— Theta Seek (@thetaseek) October 12, 2020

https://twitter.com/thetaseek/status/1315542217071550465

These Bitcoin Treasuries in Public Companies may well be seized by the government. Although Theat Seek comments were met with some amount of speculation, the current lack of complete regulatory clarity leaves this door open for further worrying.

I can't really see US government confiscating bitcoin out of the blue, or more likely than the government confiscating any other asset out of the blue. In addition to that, in case of The Government seizing BTC from private firm, they will eventually auction them back into the market at a later stage, with a  neutral net effect on total Bitcoin supply.

[exstasie]

There is also another way to see the whole Bitcoin Treasuries story which is as follows

598K #BTC that can be seized by the US Government.

I don't like this.

— Theta Seek (@thetaseek) October 12, 2020

https://twitter.com/thetaseek/status/1315542217071550465

These Bitcoin Treasuries in Public Companies may well be seized by the government.

That applies equally to Coinbase, the largest custodian in the world (almost 1 million BTC in custody), as well as all the regulated exchanges like Bitstamp, Kraken, Gemini, Bittrex, etc. The directors of these exchanges are all within arm's length of American regulators, and if push came to shove all their deposits could be seized without much effort. The recent experience at Okex (where withdrawals are still frozen due to a government investigation and the status of depositor funds is unknown) highlights the dangers.

Public companies or BTC-backed funds holding reserves is just an extension of the same dynamic. This is the inevitable path of regulation and legitimization of cryptocurrency.

[acquafredda]

I am being overly pessimistic probably. In any case, I see that as a potential danger. Fillippone, I agree with you when you say that those funds can not be seized out of the blue but still that is possible. Those are bitcoin with real owners, easily reachable with all that implies. To me that is a bit concerning moving forward.

[fillippone]

I am being overly pessimistic probably. In any case, I see that as a potential danger. Fillippone, I agree with you when you say that those funds can not be seized out of the blue but still that is possible. Those are bitcoin with real owners, easily reachable with all that implies. To me that is a bit concerning moving forward.

Let's put this way.
If there are no problem with governments seizing privately held Bitcoins, I don't worry, as the rule by law is governing humans interactions, and also governments have to abide, like every other subject, to such laws.
If there are problems with governments seizing privately held Bitcoins, bending the laws or creating laws in order to seize them, well, Bitcoin is actually the only one asset I want to own.

Anyways, I like being long Bitcoins.

[JayJuanGee]

I am being overly pessimistic probably. In any case, I see that as a potential danger. Fillippone, I agree with you when you say that those funds can not be seized out of the blue but still that is possible. Those are bitcoin with real owners, easily reachable with all that implies. To me that is a bit concerning moving forward.

Let's put this way.
If there are no problem with governments seizing privately held Bitcoins, I don't worry, as the rule by law is governing humans interactions, and also governments have to abide, like every other subject, to such laws.
If there are problems with governments seizing privately held Bitcoins, bending the laws or creating laws in order to seize them, well, Bitcoin is actually the only one asset I want to own.

Anyways, I like being long Bitcoins.

Surely, fillippone you make a good point regarding bitcoin being the most seize resistant asset, yet still there can be problems if governments were to be focusing on any narrow kinds of assets as the enemy, such as bitcoin and then befriending others as if they were more friendly... but still in the end, you are correct to suggest that bitcoin was designed around this concept that governments might become hostile to it - and we have already seen some hostility that could be ramped up, possibly, as acquafredda suggests.

Regarding acquafredda's focusing upon some kinds of government/regulatory actions that are possible or might be possible...   Ultimately, it's a BIG SO FUCKING WHAT with more FUD spreading than reality? because it is not currently happening, and there would definitely exist decently LARGE trade offs for governments to go down such a path - especially the longer that bitcoin is existence and as bitcoin has gained further and further adoption - including the adoption of public companies - and presumably more private companies too and high networth individuals too. 

I know that you, fillippone, recognize these dynamics and trade offs, but frequently we do get a lot of "what ifs" that may be truly believed and sometimes scare newbies from taking a BTC stake or making plans to take a BTC stake - because they are so busy worrying about some kind of speculative future that is very unlikely to happen... so they screw them selves into giving too much weight to such FUD based information pieces, and thus failing/refusing to take some kind of reasonable and prudent actions to allocate a sufficient portion of their investment portfolio to bitcoin.. whether somewhere in the range of 1% to 10% or some other reasonable number that is based on sound reasoning... .

So the more and more adoption of BIGGER players into the bitcoin space is going to contribute to dynamics that cause trade offs that governments might not want to attempt if they were to become increasingly hostile towards bitcoin - which would seem to be a reversal of some of the current direction in bitcoin that is largely allowing for channels for BIGGER players to get into bitcoin and even clarification of some bank custody matters.   

Sure, many governments would like to channel bitcoin interactions into KYC channels which is another ongoing attack vector that could lead to a kind of attempt to later engage in seizing of BTC stashes of individuals and companies - so we should take it into account as a direction that could come up and to attempt to protect ourselves and to attempt to create channels in which seizure attempts would cause a lot of costs for any governments attempting to go down such road.. that remains a BIG SO WHAT slim possible direction, at this time... and in that regard, we do not need to unduly focus on these kinds of matters - even while it remains healthy to keep them in mind and even engage in self custody, mixing and joining of coins in order to keep a large collection of the bitcoin obfuscated from government attack vector channels if they do attempt to engage in such seemingly short-sighted hostilities.

[fillippone]

<...>

Regarding acquafredda's focusing upon some kinds of government/regulatory actions that are possible or might be possible...   Ultimately, it's a BIG SO FUCKING WHAT with more FUD spreading than reality? because it is not currently happening, and there would definitely exist decently LARGE trade offs for governments to go down such a path - especially the longer that bitcoin is existence and as bitcoin has gained further and further adoption - including the adoption of public companies - and presumably more private companies too and high networth individuals too. 

Agree.
In addition to that, but I am not a legal expert here, so I might be wrong, that every U.S. Marshall Bitcoin auction makes more and more difficult declare Bitcoin illegal in the future.
When U.S.. Marshalls seize cocaine, for example, of course there is a market value there, but they do not sell it, they simply destroy. Similarly they could send all the seized bitcoin to a burner address instead of selling it.

So every time they sell those bitcoin, instead of burning them, they reinforce the fact they are dealing with legal items.

This greatly narrow the window for arbitrary seizure of privately held BTC in the future to the point where the "why should they do that, in the first place" i think is now the major question to be answered, even before the "how should they do that?".

[acquafredda]

I am being overly pessimistic probably. In any case, I see that as a potential danger. Fillippone, I agree with you when you say that those funds can not be seized out of the blue but still that is possible. Those are bitcoin with real owners, easily reachable with all that implies. To me that is a bit concerning moving forward.

Let's put this way.
If there are no problem with governments seizing privately held Bitcoins, I don't worry, as the rule by law is governing humans interactions, and also governments have to abide, like every other subject, to such laws.
If there are problems with governments seizing privately held Bitcoins, bending the laws or creating laws in order to seize them, well, Bitcoin is actually the only one asset I want to own.

Anyways, I like being long Bitcoins.

I know that you, fillippone, recognize these dynamics and trade offs, but frequently we do get a lot of "what ifs" that may be truly believed and sometimes scare newbies from taking a BTC stake or making plans to take a BTC stake - because they are so busy worrying about some kind of speculative future that is very unlikely to happen... so they screw them selves into giving too much weight to such FUD based information pieces, and thus failing/refusing to take some kind of reasonable and prudent actions to allocate a sufficient portion of their investment portfolio to bitcoin.. whether somewhere in the range of 1% to 10% or some other reasonable number that is based on sound reasoning... .

I am not spreading FUD and if you are concerned about noobs that can be possibly scared by my word then I do not fuckin' care.
I wrote about a potential danger (read the word potential, please) that I see possible. These bitcoins are publicly visible: imagine for a second that one of those companies going bankrupt, those assets could be seized to pay creditors etc.
Ok, I was speaking what if: then so what?
I know bitcoin properties very well, yet I can not be blurred by them.

[JayJuanGee]

I am being overly pessimistic probably. In any case, I see that as a potential danger. Fillippone, I agree with you when you say that those funds can not be seized out of the blue but still that is possible. Those are bitcoin with real owners, easily reachable with all that implies. To me that is a bit concerning moving forward.

Let's put this way.
If there are no problem with governments seizing privately held Bitcoins, I don't worry, as the rule by law is governing humans interactions, and also governments have to abide, like every other subject, to such laws.
If there are problems with governments seizing privately held Bitcoins, bending the laws or creating laws in order to seize them, well, Bitcoin is actually the only one asset I want to own.

Anyways, I like being long Bitcoins.

I know that you, fillippone, recognize these dynamics and trade offs, but frequently we do get a lot of "what ifs" that may be truly believed and sometimes scare newbies from taking a BTC stake or making plans to take a BTC stake - because they are so busy worrying about some kind of speculative future that is very unlikely to happen... so they screw them selves into giving too much weight to such FUD based information pieces, and thus failing/refusing to take some kind of reasonable and prudent actions to allocate a sufficient portion of their investment portfolio to bitcoin.. whether somewhere in the range of 1% to 10% or some other reasonable number that is based on sound reasoning... .

I am not spreading FUD and if you are concerned about noobs that can be possibly scared by my word then I do not fuckin' care.

Good for you.  Frequently when we are posting on public posts, like this, clarification is needed in order that some people might not get mislead into placing way too much weight into fringe case scenarios like you had outlined and trying to suggest that such nonsense deserves some kind of serious consideration, when it doesn't and it can be helpful to explain (or at least point out) why it does not.  In other words, posting about these kinds of substantive matters are not personal nor meant to be personal, so it is likely that no one really gives any fucks about you either (at least not in the abstract of dealing with the various evidence, arguments and attempting to assign weight to various matters).

I wrote about a potential danger (read the word potential, please) that I see possible.

Yes.  That potential that you pointed out had been noted.  There is a pretty long history in forums like this in which beartards focus on "potential," "possible" and blah blah blah, and sure all kinds of things are possible - but does not mean that any one of us should be giving very much weight to such highly unlikely scenarios and miss an asymmetric bet investment opportunity of a life time.

I recall in 2014 and 2015, in these various forum threads, we used to see purported computer science professor Jorge Stolfi spouting out all kinds of theoretical nonsense regarding so many of the various theoretical possible scenarios that could bring BTC crashing down and to cause negative pressures on BTC's price.. and sure he had a lot of ideas about a variety of "possible" scenarios that ended up getting to be shown as way less likely than what ended up happening.. causing those who even took modest BTC stakes to become quite well off by not getting so caught up with "possibilities" that did not end up even coming close to playing out.

Lot's of us have gotten rich as fuck from bitcoin because we assigned the appropriate weight to such baloney theories that we have seen (and the evidence and logic has shown) have become more and more baloney with the passage of time...

but sure, give whatever weight to those outlandish negative scenarios as you wish, and miss the bitcoin train.  That's your choice, and hopefully not too many normie peeps get overly scared by such whimsical information that is based on outlandish possibilities.

These bitcoins are publicly visible: imagine for a second that one of those companies going bankrupt, those assets could be seized to pay creditors etc.

Yes, of course there are going to be both positive and negative trade offs to disclosures that public companies have to make, and of course, they are required, by law, to be a lot more transparent with their finances and even various other fiduciary matters in order to be less likely of being accused of misleading investors.  That is one of the downsides of becoming a public company - and many ceos (or owners) of such companies have already given thoughts to a lot of those risks before they even become public companies.... sure some might not realize the extent of such transparency burdens until they have been under such practice, but still a considerable amount of transparency is already part of the known practices of public companies.

Ok, I was speaking what if: then so what?
I know bitcoin properties very well, yet I can not be blurred by them.

Well, there are all kinds of factors to consider about bitcoin in terms of attempting to figure out whether it fits your own investment thesis and thereby how much to invest into bitcoin, in the event that you choose to invest into bitcoin... and of course, there are both transparency aspects on the bitcoin blocks and there are also ongoing tools that are developed in bitcoin that may create some opaqueness in the transparencies - public companies might still be able to use some of the opaqueness tools that are available and even being developed in bitcoin, but they also do need to disclose their intentions and their actions.. and I doubt that there is even any kind of one-stop-shopping approach that public companies take in these kinds of matters.

Seems to me that many public companies had been either refusing, avoiding or merely taking mediocre stakes in their investing into bitcoin prior to the Michael Saylor example, so surely we have already discussed that so far, it appears that Saylor's boldness has provided a decent kind of example in regards to how bold a company might get in terms of their strategy to invest in bitcoin - and surely we might not be able to predict exactly how so many of the ramifications are going to play out, including if having large bitcoin holdings might end up having more costs than benefits (as you seem to be suggesting as a possibility), but many of us longer term BTC HODLers have found these seemingly bolder investing strategies into bitcoin to be quite positive for our BTC bag potential.. even if we are not 100% sure how matters are going to play out - the indicators seem to be pointing in a positive direction in terms of likely ongoing UPpity BTC price pressures.

[acquafredda]

I think we believe more or less in the same things but it takes too many words for you to express them. Anyhow, the last thing I want from you is your patronizing approach. I feel is right to stop this exchange between us because I do not wish to derail fillippone's thread. I expressed myself, others can think whatever they want about what I wrote. Having doubts does not necessarily mean that I am a "beartard".

[fillippone]

Trying to recover the thread beforre it's too much derailed from its original scope.

How is it Microstrategy trading?
Is it trading as a regular company, or as a bitcoin proxy?

Well we already have a little of evidence:



We see that despite rising market price the share of the Bitcoin investment is surprisingly not increasing the percentage of the company that can be considered "bitcoin".
Since their last investment, not to overcomplicate the analysis, bitcoin is up 53% (up 16,200 from 10,600), while the share price is up only 37% (195 USD from 145).
I think that, going further, if BTC bull run continues, the market capitalisation will  better track the BTC price, as the "bitcoin investment" part of the firm will overwhelm the "business part", being ultimately the only factor to be priced in.

[Karartma1]

Can I be a bit contrarian here? Why bother so much about the stock price while your best reserve asset keeps appreciating and basically multiply your earnings?
They won already by stockpiling bitcoin at lower prices, we can't assume a two-way correlation between the shares and the bitcoin price.
But I am open to being completely wrong on this.

[fillippone]

Can I be a bit contrarian here? Why bother so much about the stock price while your best reserve asset keeps appreciating and basically multiply your earnings?
They won already by stockpiling bitcoin at lower prices, we can't assume a two-way correlation between the shares and the bitcoin price.
But I am open to being completely wrong on this.

My reasoning behind the above post is basically they are going to profit more and more from their BTC investment than their "Real" business.
So that they will eventually become a proxy for Bitcoin investment, as the greater part of the company valuation it will simply be the Mark to Market of their Bitcoin Investment at it will outnumber any possible profit of their characteristic business.
 

[jaberwock]

^ Why would public company's bitcoins get seized? I mean I do not see any reason why these companies could be in trouble for buying bitcoin, it is something anyone can do and it is something that is allowed and legal, so there is no reason why they should be seized?

I understand that if a company does something illegal, that means government could seize their assets to pay back the people they scammed or faulted but that is not all the bitcoins these treasuries have, it is just the ones that does something bad and that wouldn't be the huge ones.

So, day technically speaking it could be seized if everything goes wrong, but legally speaking unless something bad happens there is never going to be a seizing of assets for just keeping it in bitcoin, that is not a reason to do it.

[acquafredda]

Can I be a bit contrarian here? Why bother so much about the stock price while your best reserve asset keeps appreciating and basically multiply your earnings?
They won already by stockpiling bitcoin at lower prices, we can't assume a two-way correlation between the shares and the bitcoin price.
But I am open to being completely wrong on this.

My reasoning behind the above post is basically they are going to profit more and more from their BTC investment than their "Real" business.
So that they will eventually become a proxy for Bitcoin investment, as the greater part of the company valuation it will simply be the Mark to Market of their Bitcoin Investment at it will outnumber any possible profit of their characteristic business.
 

Makes sense and it would be amazing to see this headline in the future:
"MicroStrategy close its operations after selling BTC reserves" 
Like many early adopters who are now early retirees, the same could happen to public companies which are holding BTC. They will stop operating due to the immense profit in the long run. Why keeping working when your reserve assets make millions every day?