Saylor has created a fiat system on top of Bitcoin

[dzonikg28]

As Free Market Capitalist says, it is contrary to the purpose of Bitcoin. If we break down what the original Bitcoin vision was intended to address, which is remove trusted intermediaries, avoid central bank money creation, reduce leverage-based monetary expansion, create hard money with fixed supply, allow direct ownership without custodians, weaken dependence on debt-driven finance and more.

The purpose of Bitcoin was never to weaken the dependence on "debt-driven finance", I don't know where this comes from. If you're an adult and understand how this world functions, you understand that there is capital that is impossible to reach the Bitcoin liquidity, and only through third party companies can it reach it. If you're an individual, obviously buy the asset yourself, but for the trillions of dollars that have no accessibility to the bearer asset, a liability on bitcoin than no bitcoin at all is far better, and far closer to the original purpose, which is to protect yourself from the central banking artificially created inflation.

Even adults don't understand everything at first glance, which you have just proven. But that is not the end of the world, we got time to learn until the end of life.

Financialization is not the problem, hyper financialization is the problem and since there is no boundary limiting the number of layers or the level of leverage, the base asset Bitcoin will most likely be overcollateralized while the price finding mechanism stop working efficiently due to financial layer complexity. Supposedly it is not good for Bitcoin, but can't be avoided either.

[Cookdata]

As a side note, I hope you all understand that, if it weren't for Saylor, Musk, Donald Trump, and a few other whales, BTC would be trading for about $1000 right now.

Keep that in mind before you say, "billionaires go home"  .

You know the last time Bitcoin traded around 10k, it was during the globe market collapsed when oil was trading at negative price, the price I remember Bitcoin that time was $15k, this was the lowest on all exchanges. So you coming out to troll here that Bitcoin will trade below $1000 means you are not just dumb, you have memory problem.


There is something I have experience in every bull market and bear market, the bull brings different people with different games and the purpose is always money and noise but there is a face mask to cover their intentions and during the bear market, all of it becomes exposed because that's the time the market differenciate between reality and fantasy.
I have always doubt Saylor, those billion dollars are not free money, the guy wouldn't sit on Bitcoin without doing nothing but I'm glad things are becoming clearer now.

You know what's more interesting about this Saylor and share holders, they will have to trust him more than they should have buy Bitcoin on the market instead.

[BlackHatCoiner]

Financialization is not the problem, hyper financialization is the problem and since there is no boundary limiting the number of layers or the level of leverage, the base asset Bitcoin will most likely be overcollateralized while the price finding mechanism stop working efficiently due to financial layer complexity. Supposedly it is not good for Bitcoin, but can't be avoided either.

Credit is not a parasite on the economy. Railroads, factories, the mortgage on your house, all are financed by someone's savings lent forward through time. A world where nobody lends isn't purer, it's poorer.

The real rot is that the base money is elastic. And that's exactly why leverage has no ceiling today. Every layer knows that if enough of them are wrong at once, a lender of last resort will print the reserve asset to save the losers.

When Strategy over-levers and gets it wrong, they get liquidated. Period. Gold ran on an enormous credit superstructure under the classical gold standard. What killed it wasn't the layers, it was that gold is physically centralisable, so the state confiscated the base and replaced it with pieces of eagle paper. Bitcoin fixes this.

[legiteum]

As a side note, I hope you all understand that, if it weren't for Saylor, Musk, Donald Trump, and a few other whales, BTC would be trading for about $1000 right now.

Keep that in mind before you say, "billionaires go home"  .

You know the last time Bitcoin traded around 10k, it was during the globe market collapsed when oil was trading at negative price, the price I remember Bitcoin that time was $15k, this was the lowest on all exchanges. So you coming out to troll here that Bitcoin will trade below $1000 means you are not just dumb, you have memory problem.

LOL, so you can remember 5 years ago when BTC was $15k but not 9 years ago when it was $1k. 

That's called "selective memory", pal. 

I don't pretend to know what BTC will trade at a year for now, unlike the religious Bitcoin hard-cores who are 1000% certain it's going to moon.

One of us here is looking at the market like a scientist, and the other is looking at it like a religious zealot...

The real rot is that the base money is elastic. And that's exactly why leverage has no ceiling today. Every layer knows that if enough of them are wrong at once, a lender of last resort will print the reserve asset to save the losers.

I agree with this problem, but it has nothing to do with the money supply. The "too big to fail" principle you are highlighting here is purely about political corruption, and could happen regardless of the state of the sovereign currency. The two subjects don't have anything to do with each other.

And before you say it, no, it has nothing to do with the US's ability to denigrate our currency: it has to do with the fact that our tax base is huge and our tax rate has a lot of room to grow. Hence there's no "collapse" coming from the inability of US taxpayers being able to pay, only a political collapse of whatever party is in power when they inevitably need to raise taxes, which will piss voters off (not "destroy" them, just make it so they can't have as many nice things). US taxes can be raised A LOT before we can't pay our national debt. That's why the world (including a lot of US citizens) loans our government money at such low interest rates.

[Dogedegen]

I was talking mainly about the debt. You are probably correct about the dividends being a bigger issue.

The main issue with the dividends for me is that the rate is so big, a bit more than 10%. This adds up a lot in the long run so they have to buy back those shares or do something otherwise they will have to pay a lot.

The thing is that the 0% interest rates were achieved in a very bullish period. While Bitcoin is bullish in most years, MSTR can't depend on that, because they will not always be able to re-finance the same volume of debt than in the market situation close to the 2025 Bitcoin top.

I don't think that is how loans work, they may not be able to get interest rates close to 0 but they will not suddenly jump to something huge when we talk about debt in the billions range. What I meant with refinance is that they can take out a new loan to pay back the old one since they have a lot more collateral value now, this should be no issue at all and even if it is a slight jump in interest rates it is still much less of a new issue than the dividends.

However I still guess that MSTR can "carry it on" for a long time due to their low operational costs. If either the bonds or shares fall too low, they can try to buy them back. They'll probablty have to sell Bitcoin for that though, so these actions would push the BTC price and the company value further down and thus the company would shrink.

Maybe that could be one alternative scenario strategy that they could pursue? Try to crash the price of the shares with whatever way they legally can, and then they can buy back the most shares with the least amount of Bitcoin sold? Do you think this is plausible? If you look at their last sale which was nothing, but it had a big impact on the share price which would mean that they basically got a discount if they tried to buy them back now even though they sold very little Bitcoin to get this discount.

I could see a new equilibrium when the BTC price is already either so low that nobody wants to sell anymore even when MSTR sells  - or if the Bitcoin traders degrade MSTR to a low priority, because other news are more important, for example "real" adoption. That is, for me, the bullish case for Bitcoin even if MSTR fails almost completely.

Maybe that would be too much of another topic but I would be interested in reading about our current prospects of "real" adoption.

But for now, traders are still taking MSTR into account. That will continue for a while. I think the bearish movement today and yesterday were however not "only" caused by MSTR, but also the quite uncertain situation in the Middle East.

Yes those things but there is also a big liquidity drain going with the coming IPOs, don't underestimate those. SpaceX, Anthropic and OpenAI. This will drain liquidity like never before in a single event of this kind! So we have many things happening at the same time, the timing is unfortunate.

[Free Market Capitalist]

It was 220 shares per bitcoin last time I posted. You can check in strategy website.

I don't think you check that website more frequently than me.

Ofc bitcoin per share is relevant. Why cant a company buy bitcoin and say that each share owns X satoshi? When you buy a share you own a fraction of the company.

Because it is simply false. Each share doesn't "own" X satoshis, it has satoshis "exposure".

First, those satoshis aren't redeemable. Second, the concept only applies to the shares that are at the bottom of the capital structure, in other words, in the event of a liquidation, MSTR shareholders would not receive a single satoshi—or just crumbs. And finally because right now, when he is trying to push the STRC  ATM, what happens is that every time it sells a share of STRC and tells you that your MSTR share has more bitcoins per share, he doesn't tell you that he's added more people above you who have priority over the bitcoins he purchased.

With the exception that the fiat system uses an army to enforce everyone to treat it as money, whereas everyone buying Strategy products does it voluntarily? I don't see how using Bitcoin however you wish is contrary to the purpose of Bitcoin.

I’ve explained this to you before, but you keep bringing this up. When I say he’s created a fiat system, it’s because his system has a potentially infinite supply of shares, just like the monetary system, and because it’s based on the belief, or faith, that Saylor’s gamble will pay off.

And yes, I don't consider MSTR or STRC to be worth the risk. I would rather save in bitcoin instead.

That’s the thing: if you hold your own Bitcoins—especially in cold storage—and the price takes a big dive, you just sit tight and hold on to them. Strategy’s products, on the other hand, carry a clear company risk. 80% of STRC is held by retail investors. If the stock price drops below $90, panic will set in, and we already know how retail investors behave when there’s panic.

Bitcoin per share is just another bullshit concept, I'll have to start a new thread to explain it, because it applies to shares that rank just at the bottom of creditors.

Mathematically it is indeed much more complex than that due to the liquidation cascade if the system goes out of balance (bonds -> STRF -> STRC -> STRD -> STRK -> common share). I just looked into that for an answer in another related thread (and the videos you linked confirms that, just looked into it), and yes, technically you're correct that it's "bullshit" because there's no direct backing and there's no easy fixed BTC/share relation for each type of share.

...

This is just because how you wrote in your answer to BlackHatCoiner - fiat is anchored to GDP, not to reserves. But Strategy has practically no equivalent to a "GDP" because their only business model is managing "reserves". If they had still a substantial software business things would be different. And maybe if they really build up a major lending business they would again have some substantial "GDP".

So I consider these "bullshit numbers" much more important for Strategy, and be it as a "marketing vehicle", than for fiat.

Overall, I agree with the analysis that GDP is more important for fiat than for Strategy, but the company doesn’t just manage reserves. It creates new products. MSTR was already created; then he started buying Bitcoin with convertible debt to push MSTR as a leveraged play on bitcoin, then launched the ATM, and then began issuing preferred shares to which it also applied the ATM. It doesn’t just manage reserves.

[bitmover]

Ofc bitcoin per share is relevant. Why cant a company buy bitcoin and say that each share owns X satoshi? When you buy a share you own a fraction of the company.

Because it is simply false. Each share doesn't "own" X satoshis, it has satoshis "exposure".

First, those satoshis aren't redeemable. Second, the concept only applies to the shares that are at the bottom of the capital structure, in other words, in the event of a liquidation, MSTR shareholders would not receive a single satoshi—or just crumbs. And finally because right now, when he is trying to push the STRC  ATM, what happens is that every time it sells a share of STRC and tells you that your MSTR share has more bitcoins per share, he doesn't tell you that he's added more people above you who have priority over the bitcoins he purchased.

I get your points. But you are thinking the wrong way imo.  MSTR isnt a bitcoin ETF.  People arent buying bitcoin.

People who buy MSTR shares aren't buying bitcoin, they are buying a company which has bitcoin exposure.
Investors of the company arent guaranteed any bitcoin. If Saylor decides to sell all bitcoin shares  he is allowed to. All share owners are the same and there is no priority between them.

If later on saylor decides to sell bitcoin and buy Doge or whatever and the shares goes to zero that is still inside the rules..

People who buy those shares are susceptible to his decisions.

[BlackHatCoiner]

I agree with this problem, but it has nothing to do with the money supply. The "too big to fail" principle you are highlighting here is purely about political corruption, and could happen regardless of the state of the sovereign currency. The two subjects don't have anything to do with each other.

So you're telling me that a bunch of non-elected bankers who control the money supply and can just print money to lobby politicians and organizations have no influence to the process of political corruption?

Why are you so in denial that the people who can print money might actually be behind all the atrocities, from political corruption to wars and genocide? Does it really seem so impossible to you that infinite purchasing power means you can buy off and blackmail politicians? Is this beyond the realm of possibility for you?

[d5000]

It's not even this. The GDP is anchored to fiat. GDP is a meaningless metric that can go up in terms of war and down in terms of growth. It is completely tied to the money supply.

There can be indeed an influence of money supply to GDP. But we could just re-phrase the relation I "really" meant in other words - that fiat is "backed" by the goods and services available in a country or economic area in a specific timeframe. (GDP is even incomplete for that, we also have to take into acount "static" wealth, like real estate).

And then it becomes 90%+ an one-sided relation again. There may be edge cases (again Venezuela) where problems with the fiat supply has major impact on the "number of goods and services", but most of the time it is the other way around. The problems arise if the relation between money supply and "goods and services" becomes too imbalanced, like in the early 2010s and the early 2020s (the "Covid supply boost") in many countries.

[legiteum]

I agree with this problem, but it has nothing to do with the money supply. The "too big to fail" principle you are highlighting here is purely about political corruption, and could happen regardless of the state of the sovereign currency. The two subjects don't have anything to do with each other.

So you're telling me that a bunch of non-elected bankers who control the money supply [...]

The Fed is setup by Congress and appointed by the President. These people aren't themselves elected, but they are certainly under democratic control.

[...] and can just print money to lobby politicians and organizations have no influence to the process of political corruption?

No, they can't "print money to lobby politicians". That's not even remotely how the Fed works.

As for corruption, focusing on the Fed is ridiculous when there's so much actual corruption going on, e.g. the "too big to fail" thing you mentioned above. That scheme is very corrupt, warps the financial markets, steals money from taxpayers, and... has absolutely nothing to do with the Fed.

Why are you so in denial that the people who can print money might actually be behind all the atrocities, from political corruption to wars and genocide? Does it really seem so impossible to you that infinite purchasing power means you can buy off and blackmail politicians? Is this beyond the realm of possibility for you?

Because there's no evidence? Because the idea of it is absolutely retarded?

Sorry, but you are afraid of this lady secretly controlling the worldwide financial system...



and not this guy lobbying the US government to take your tax dollars and put them in his own pocket?





Really?

[BlackHatCoiner]

Wow. I am not sure if you're joking or you genuinely mean what you say.

First of all, I never said the Fed directly funds the corruption. I never said people working at the Fed fund the corruption. Fed is the creature that feeds the banking system that funds the corruption.

You haven't ever watched a documentary about banking in your life? Ever read a book about the scandals from the banking system? Ever read Ron Paul? Or are these just conspiracy theories to you? You can't really haven't come across a video that exposes the scam in your life.

[Ambatman]

Because it is simply false. Each share doesn't "own" X satoshis, it has satoshis "exposure".

First, those satoshis aren't redeemable. Second, the concept only applies to the shares that are at the bottom of the capital structure, in other words, in the event of a liquidation, MSTR shareholders would not receive a single satoshi—or just crumbs. And finally because right now, when he is trying to push the STRC  ATM, what happens is that every time it sells a share of STRC and tells you that your MSTR share has more bitcoins per share, he doesn't tell you that he's added more people above you who have priority over the bitcoins he purchased.

I get your points. But you are thinking the wrong way imo.  MSTR isnt a bitcoin ETF.  People arent buying bitcoin.

People who buy MSTR shares aren't buying bitcoin, they are buying a company which has bitcoin exposure.
Investors of the company arent guaranteed any bitcoin. If Saylor decides to sell all bitcoin shares  he is allowed to.

I believe you both saying same thing in understanding that investors don't own Bitcoin.
And on owning a share and bitcoin per share
Well a Company is an entity on it's own.
The Bitcoin is owned by the Company while the investors have rights in the life of the company.

All share owners are the same and there is no priority between them.

There was an image then that showed level of priority then
All ordinary shareholders do but Bond holders have more priority than ordinary
Likewise some preferential shares.

[legiteum]

First of all, I never said the Fed directly funds the corruption. I never said people working at the Fed fund the corruption. Fed is the creature that feeds the banking system that funds the corruption.

Like saying the local gas station actively funds crime because criminals put gas in their cars. Sure, the Fed is there, but that's not its purpose nor is directly connected to any corruption anymore than it's connected to every other bit of economic activity since they are the central bank.

But sure, keep telling yourself that it's not the oligarchs right in front of us buying off our government, but rather a secret conspiracy by the jooooooooozzzzz.....

[Dogedegen]

I get your points. But you are thinking the wrong way imo.  MSTR isnt a bitcoin ETF.  People arent buying bitcoin.

People who buy MSTR shares aren't buying bitcoin, they are buying a company which has bitcoin exposure.
Investors of the company arent guaranteed any bitcoin. If Saylor decides to sell all bitcoin shares  he is allowed to. All share owners are the same and there is no priority between them.

If later on saylor decides to sell bitcoin and buy Doge or whatever and the shares goes to zero that is still inside the rules..

People who buy those shares are susceptible to his decisions.

I would expect investors to know the differences in share structure and who has priority in the event of liquidation. Bitcoin is about personal responsibility too, so I do not see how we could blame Strategy for an investor not knowing the basics of capital structures and then getting involved in something that they did not understand. Sure among all the investors there are a fair amount that are buying this way, but the responsibility for those entirely lies with the individual. As long as the company is not doing anything illegal, all responsibility for decisions relating to investment come down to the individual. We can't defend someone who buys Strategy with the belief that the decisions of Saylor would not affect the company or that they are actually getting satoshis per share and not just exposure to it. I don't agree that the share owners are the same, in many cases such as liquidation of the company there are differences and priorities between the shares.

All share owners are the same and there is no priority between them.

There was an image then that showed level of priority then
All ordinary shareholders do but Bond holders have more priority than ordinary
Likewise some preferential shares.

There is some flexibility in how companies can be structured, but overall it works the same for most companies so general shareholders are not always treated identically. You can issue different classes of share which can then have differences when it comes to rights, preferences in liquidation, voting rights, dividend rights and other things like that. I would be careful to say that there is no priority between them as bitmover wrote because that sounds wrong. In many cases shareholders do have priority. Even if outside of such situations they can be treated equal in some ways, that is not the same as saying that all share owners are the same.

[bitmover]

All share owners are the same and there is no priority between them.

There was an image then that showed level of priority then
All ordinary shareholders do but Bond holders have more priority than ordinary
Likewise some preferential shares.

Bond owners do not own any bitcoin and arent expected to.

Bond is just debt. Bond holders are just  people who borrowed money to strategy. They borrowed usd and are expected to receive usd in return.

[Dogedegen]

All share owners are the same and there is no priority between them.

There was an image then that showed level of priority then
All ordinary shareholders do but Bond holders have more priority than ordinary
Likewise some preferential shares.

Bond owners do not own any bitcoin and arent expected to.

Bond is just debt. Bond holders are just  people who borrowed money to strategy. They borrowed usd and are expected to receive usd in return.

Even if your current description is mostly correct it does not make your original statement correct. I would like to mention here that there are exceptions such as convertible bonds which were frequently used by Strategy, and in case like that they are not expected to receive USD in return. They have the ability to choose if they want to become equity holders or if they want to get cash. Besides that in some other cases bonds can have repayment structures that are not standard, they could be linked to assets or even other securities.

But still your original sentence that all share owners are the same and that there is no priority is wrong. If you look at liquidation priority it would be something like this:
1. Secured creditors.
2. Unsecured creditors.
3. Preferred shareholders.
4. Common shareholders.

So it is false to claim that there is no priority. In the case of liquidation the priority group must be paid full before the next group can get anything, so depending on the structure and the liquidation event common shareholders may get nothing even preferred shareholders could get very little if there is a lot in the first 2 groups.

Another issue I have with your last statement, because how you write that the bond holders are not expected to own any Bitcoin it kind of means that you think there are other groups like shareholders that are expected to get Bitcoin in return or you think that shareholders would get Bitcoin in return during a liquidation? Both are wrong then, shareholders do not own any Bitcoin and are not expected to own any Bitcoin. They own equity of Strategy, that is different. If there was a liquidation they would not get BTC, they would get USD if there is enough money after paying other priority groups.

[Free Market Capitalist]

But still your original sentence that all share owners are the same and that there is no priority is wrong. If you look at liquidation priority it would be something like this:
1. Secured creditors.
2. Unsecured creditors.
3. Preferred shareholders.
4. Common shareholders.

So it is false to claim that there is no priority. In the case of liquidation the priority group must be paid full before the next group can get anything, so depending on the structure and the liquidation event common shareholders may get nothing even preferred shareholders could get very little if there is a lot in the first 2 groups.

Another issue I have with your last statement, because how you write that the bond holders are not expected to own any Bitcoin it kind of means that you think there are other groups like shareholders that are expected to get Bitcoin in return or you think that shareholders would get Bitcoin in return during a liquidation? Both are wrong then, shareholders do not own any Bitcoin and are not expected to own any Bitcoin. They own equity of Strategy, that is different. If there was a liquidation they would not get BTC, they would get USD if there is enough money after paying other priority groups.

That’s what I was trying to explain to him earlier with the three points listed above. Bitcoin per share is a bullshit concept for that very reason. On their website, under the MSTR tab, they claim that Bitcoin per share is increasing, when in reality the probability that you’ll actually receive any of it is getting smaller and smaller. It’s just another fictional concept that many people don’t understand and simply take at face value—which brings me back to faith.

If you make a rational analysis of what the company is doing, the only reason left for you to invest in one of its products or maintain your investment if you’ve already made it is faith.

Right now, it’s paying 11.5% interest on STRC while the Bitcoin he purchased has a -20% return. What’s he going to do? Raise the dividend again, like he has before? Only someone who doesn’t understand basic math would buy Saylor’s pitch that STRC is a safe alternative to bank deposits and savings accounts.

Another concerning development is that we are approaching the sixth anniversary of what he calls the Bitcoin Standard Era—that is, the time he began buying Bitcoin. The world’s largest Bitcoin buyer may reach that anniversary with a negative return on his purchases, not exactly helping the overall market sentiment, which doesn’t seem to be very buoyant this year.

[Alpen]

We cannot stop anyone from doing whatever they want with Bitcoin. Since Bitcoin is the best form of money ever used by humanity, it was inevitable that bankers, BlackRock, Saylor, and various other fraudsters would eventually appear around it offer various financial products and “paper Bitcoin,” using the same kinds of manipulation and fraud that have been practiced with gold for centuries.

Bitcoin has an advantage over gold because it will be much harder for fraudsters and bankers to manipulate. Bitcoin is relatively easy to hold in self-custody, giving people direct control over their own money.It is much easier to verify how much Bitcoin exists. With gold, it is far more difficult to verify how much is actually held in a vault or to take it into self-custody. That is why fraud and manipulation have been possible for so long.

People don't actually control Bitcoin. Wallets don't hold anything except the access keys to coins on the blockchain, and the blockchain itself is controlled by miners.

Right now, they have weakened their control by 45%. Overnight, our assets became almost twice as insecure. Meanwhile, miner rewards keep getting smaller and smaller. A huge portion of these miners is concentrated in a single jurisdiction, and they all depend on centralized IT infrastructure.

If the US bans mining tomorrow and imposes international sanctions on it, where exactly do you think the hash rate will end up?

[BlackHatCoiner]

Sure, the Fed is there, but that's not its purpose nor is directly connected to any corruption anymore than it's connected to every other bit of economic activity since they are the central bank.

The world does not need a central bank. If you actually believe in capitalism and in property rights, you understand that banking, credit issuance and money creation fall into the needs that are best to be satisfied under market competition. Ask yourself: what is the purpose of a central bank? The answer is to serve the interests of the private banks that formed it. Why would private banks be interested to create a State owned institution that dictates how banking will operate within the country? Because they control it, and monopolize the banking system.

Forget the Jews. Just ask yourself how would private banks want to pass the Federal Reserve act so bad.

[legiteum]

Sure, the Fed is there, but that's not its purpose nor is directly connected to any corruption anymore than it's connected to every other bit of economic activity since they are the central bank.

The world does not need a central bank. If you actually believe in capitalism and in property rights, you understand that banking, credit issuance and money creation fall into the needs that are best to be satisfied under market competition. Ask yourself: what is the purpose of a central bank? The answer is to serve the interests of the private banks that formed it. Why would private banks be interested to create a State owned institution that dictates how banking will operate within the country? Because they control it, and monopolize the banking system.

Forget the Jews. Just ask yourself how would private banks want to pass the Federal Reserve act so bad.

Central banks were created to bring stability to the banking system. Their contribution to the economy has been incalculable. It's unthinkable to have a modern economy without central banks, anymore than you can have a country without police.

As for banks themselves, they spend billions lobbying for... DEregulation. Oops.