Selling bitcoin at $60k and then buying back later at $80k

[Accardo]

Since they are one of the whale investors in the world, they probably know better than us what to do and what will benefit them. From a general perspective, the decision is not ideal at all, but you have to make tough decisions to survive the organization at some point.

Whenever I see Michael's photo I remember how big his company holds bitcoin, aside profiting or losing, bitcoin is a massive publicity engine for MicroStrategy, they're actually milking from the bearish and bullish state of btc. while they're financial specialists, selling at a loss to empower the selling of their shares is a decision that was supposed to affect the price of btc, on a reverse btc went bullish from what Secretary Scott is doing with bonds, and the company switched back immediately to buy more, garnering more publicity from the recent bullish move.

[Slow death]

These guys have a lot of bitcoins that were bought at a low price. Just this year, up until August, they bought 175,000 bitcoins. As far as I know, the bitcoin prices in January were $79,000, February $67,000, March $68,000, April $77,000, May $72,000, June $57,000, July $64,000, and August $80,000. So, at this moment, they are in profit with the bitcoins they bought this year alone. Even if they sold 7,000 bitcoins, it won't change much for them. A company like that, with a lot of bitcoins, will always make a lot of money in the long run. This new purchase they made, when the price of bitcoin reaches $125,000, will be a very large profit. They're not in this market to hold until they die like some people; they're in it to profit and have a lot of dollars in the bank.

[jcojci]

They might not make a wrong decision selling Bitcoin, they already calculated how much profit and lose they get by selling at that price. We can only see how come they sell at $60k then buy at $80k and thinks that they lose in fiat.

But if their average price is at $62k, they still profits $2k so they will have a chance to buy back. But if they can sell at $125k, their profit will be big as their average price $62k and the price increases to $125k which gives bigger profits.

[Darker45]

If we only consider the basic arithmetic in selling at $62,200 and buying back at $80,318, that's obviously a bad deal. However, theirs isn't simply an individual Bitcoin investor. Theirs is a public company. There's a balance sheet that needs to be actively maintained. There are investors who have to be kept confident. There are obligations that need to be fulfilled. There's MSTR that needs to stay afloat all the time.

If there's a need to sell BTC at a cheaper price than when it will be bought back, they have to. Anyway, with purchases using DCA, I believe the average accumulation price of Strategy remains lower than the current BTC price. Their Bitcoin reserve is still in profit.

[X-ray]

At first, I also looked at this Strategy move and thought, “How would someone sell Bitcoin around $60k and come back to buy at $80k?”
But when you look at what actually happened, it wasn't really a normal Bitcoin trade.
Strategy sold about 6,916 BTC at an average of roughly $62,200. They needed the money mainly to handle their preferred-stock obligations and strengthen their balance sheet.
Later, their situation changed. They were able to raise money by selling MSTR shares while the stock was trading at a premium, and they used about $369.7 million of that money to buy 4,603 BTC at $80,318 each.

They are avoiding biggest structural cost by banking on cash by selling a little bit of their bitcoin straight from their treasury to keep STRC price afloat, it was literally going down and everybody was scared holding it.

The stablecoins that got backed by the stock is depegging, and are constantly watching the price and ready to dump the STRC to at the very least save the stablecoin, even though the fact that a stablecoin backed by STRC is the biggest fallacy.

The growing cash reserve has increased the confident toward STRC saving it from going below $90 again and right now it's very close to trade at par. If they don't do this and the price cascades, they'd need to pay for a higher interest to attract liquidity for their junk stock.

If they enacted higher interest just to attract buyers, they'll have lesser cash in reserves and more selling from their bitcoin reserve which is going to magnify the danger of structural collapse. The act of selling low and buying high is actually pretty trivial when you are facing the looming problem of structural collapse.

[m2017]

At first, I also looked at this Strategy move and thought, “How would someone sell Bitcoin around $60k and come back to buy at $80k?”

Next time I have a losing trade with bitcoin (bought high, sold low), I’ll use the same excuses: that everything is under control, I’m sticking to a long-term investment strategy, and it was done to meet financial goals.

But when you look at what actually happened, it wasn't really a normal Bitcoin trade.

It is certainly not a standard approach, as the typical strategy of the individual BTC-investor (buying with spare cash and holding until better times) is unacceptable for corporate investors.

Strategy sold about 6,916 BTC at an average of roughly $62,200. They needed the money mainly to handle their preferred-stock obligations and strengthen their balance sheet.
Later, their situation changed. They were able to raise money by selling MSTR shares while the stock was trading at a premium, and they used about $369.7 million of that money to buy 4,603 BTC at $80,318 each.

To the average person, this does not look particularly favorable. However, as can be seen, somewhat different market "laws" apply to such investors.

So their thinking wasn't simply: “Bitcoin will fall, let me sell.” It was more like: “Right now, BTC is the cheapest/most convenient source of cash for what we need to pay.” Then later: “Now we can raise money through MSTR at favourable terms, so let's use that money to buy more BTC.”

That is a valid observation, and I imagine it closely mirrors the discussions taking place in executive offices at the time. I would also add that these people are guided by a long-term strategy spanning years, rather than by the immediate gains from the asset’s price fluctuating between $60k. and $80k.

That's why their CEO said their Bitcoin decisions are based more on cost of capital and the company's balance sheet than on whether Bitcoin is $60k, $80k or $100k.

This statement seems quite reasonable.

Of course, if you're looking at it strictly as a Bitcoin holder, it still looks like a bad deal: sell lower, buy higher, and you don't even buy back everything you sold, They sold 6,916 BTC and only bought 4,603 BTC back, so I wouldn't call it a brilliant Bitcoin trade, it's better understood as corporate financial management using Bitcoin as a treasury asset, and honestly, this is probably the interesting part of Strategy's model now: they are no longer saying Bitcoin can only go into the treasury, they are showing that, when necessary, Bitcoin can also come out of the treasury to solve a financial problem.

Because they have to adjust to market realities and shift their strategies, adapting to the most advantageous situations. It is always the most adaptable, the one most flexible in the face of change, that survives.

[asriloni]

It's a laughable strategy by Saylor. Imagine you accumulated bitcoin for years, then ignore it when it's peaked instead selling it at a lost when it's dumping. This is validating if Saylor is not even different than us who also buy at top and sell at bottom. I'm wondering whether his chatgpt told him to did it.

His business mechanism won't be last for a few decades if he will always repeat it. The reason to raise money for his company should not be used as an excuse to sold his btc at a lost because he could sell his btc to raise cash when each btc worth than 120k.

[Outhue]

They made a lot of killer profits on Bitcoin high already, so if they sold at 60k and buy back at 80k it is still not a bad move for me, now we are heading to a new all time high which means the bear is over and many who are waiting for 55k or 48k have become sidelined, this is why it's a bad move waiting and waiting for a specific price target before you start buying Bitcoin.

I was one of them, those who wanted under 50k but my thesis changed after a while, all tools are flashing that the bottom is in and I just can't go against that reality to fill my desire, I will regret and it's why I started buying some amount at least to avoid missing out completely.

[TheUltraElite]

Its simple, sell coins to get fiat to stabilize the stocks, then offer the stocks to public and use the funding to buy more bitcoin, the difference in the last two is a profit for the company. Most of the companies that are storing bitcoin in their background are also doing same. ETFs helped pave the way to allow this to be done easily. They buy bitcoin on your behalf and you buy their ETF at a premium, profit is only on the hands of the company much higher in volume than yours, because there are a hundred other customers like you doing the same on that company.

These companies are here for the long term but the difference with them and individuals who are also running long term is that the former has investors who need to be answered at regular intervals but bitcoin does not change its price at regular intervals. Individuals dont have backing investors (usually speaking), and hence they can wait for years till price goes up or down.

[OcTradism]

They made a lot of killer profits on Bitcoin high already, so if they sold at 60k and buy back at 80k it is still not a bad move for me, now we are heading to a new all time high which means the bear is over and many who are waiting for 55k or 48k have become sidelined, this is why it's a bad move waiting and waiting for a specific price target before you start buying Bitcoin.

With institutional investors like Strategy, their effects on the market are not only trading volume, buying and selling volume but most important are psychological effects. With big capital, institutional investors can buy large and sell large bitcoin in volume, that can affect market price, but more than that psychological effects, rumors in the market will make many people FOMO or panic with their buying and selling decisions and actual orders.

The psychology of market cycles is very important and interesting as when Bitcoin is around $80k, people psychology are very different in a bull market months ago or bear market recently.

Wall Street cheat sheet: The psychology of market cycles.

[IceLincoln]

Company strategy and personal strategy will never be the same. Even the kind of decision you make in Bitcoin investment may not work for a company. An individual needs savings, but a company needs profits. You can have an emergency fund for emergencies, but a company emergency is so expensive that it may be difficult to cover it with emergency funds.

Since they are one of the whale investors in the world, they probably know better than us what to do and what will benefit them. From a general perspective, the decision is not ideal at all, but you have to make tough decisions to survive the organization at some point.

Yeah this is the way I’m looking at it too. An institutional investor and an individual investor can never be the same and their strategies too. Strategy already understands what it means to hold Bitcoin and also buying they don’t look at price. Even an individual shouldn’t be concerned with price if you’re buying Bitcoin so long as the goal is to hold for a long term.
Emergency funds are very important for our investment especially as individuals, big companies have a way of offsetting their emergencies even if it means selling a portion of their bitcoin, doesn’t mean they’ve made a bad deal.

[Peanutswar]

There is nothing wrong with their strategy because if you were there and you seen that you already make a small profit with your bitcoin hodlings and your prioritization is to pay all of your stake holders that trusted your business, id rather priority them because they trusted me and the business same thing like they did, they need to secure the trust of their investors to sustain the company and the business. Now if they seen profitable already and they head to the long term investment, buying back can be a good solution to accumulate more bitcoins.

[Ashawowo(OS)]

So they have the plans that if bitcoin continues to increase, their businesses stay strong and become larger.

When the price of bitcoin goes higher, Strategy's stock (MSTR) also rallies higher due to their voluminous bitcoin holdings. As the price of its common stock goes higher, they can easily issue some of its stock to users and use the cash raised from this sales to buy more bitcoin and push the price higher, thereby restarting the cycle.

This is why it seems they buy more when the bitcoin price is soaring and it would seem to a common man like they're loosing out while in reality the rising prices of bitcoin works to their advantage and provides more income to them which they reinvest into buying more bitcoin.

[Y3shot]

They made a lot of killer profits on Bitcoin high already, so if they sold at 60k and buy back at 80k it is still not a bad move for me, now we are heading to a new all time high which means the bear is over and many who are waiting for 55k or 48k have become sidelined, this is why it's a bad move waiting and waiting for a specific price target before you start buying Bitcoin.

I was one of them, those who wanted under 50k but my thesis changed after a while, all tools are flashing that the bottom is in and I just can't go against that reality to fill my desire, I will regret and it's why I started buying some amount at least to avoid missing out completely.

The goal should always be to buy bitcoin. Those who wait to buy bitcoin have one particular characteristic. Just imagine someone waiting for a dip, and unfortunately, the person is lucky to buy bitcoin at the price they want. If the bitcoin price dips further, it becomes a problem because those who wait to buy bitcoin expect that since they bought at that low amount, the bitcoin price should just start pumping. But those who never care about the price, no matter what price they buy at, even if bitcoin dips, they never bother about it; instead, they see it as an opportunity. Most people who consider price and wait for the price of bitcoin to fall before buying are just greedy and not really smart; volatility is a big challenge for them in the market.

[Dave1]

At first, I also looked at this Strategy move and thought, “How would someone sell Bitcoin around $60k and come back to buy at $80k?”
But when you look at what actually happened, it wasn't really a normal Bitcoin trade.
Strategy sold about 6,916 BTC at an average of roughly $62,200. They needed the money mainly to handle their preferred-stock obligations and strengthen their balance sheet.
Later, their situation changed. They were able to raise money by selling MSTR shares while the stock was trading at a premium, and they used about $369.7 million of that money to buy 4,603 BTC at $80,318 each.

Yes, and it's no secret, everything is public when they sold, how much and why they sold. It's that the timing of the market is not on their side. Nevertheless, as Saylor's goal is to remain as the biggest holder of Bitcoin because he see the potential profit that his company is going to make, then he will buy regardless at $80k.

And when the market goes on the bull run, and as what others have predicted that we can get as high as $400k next, then obviously, that $60k selling could be negated when we have that kind of price as our next all time high.

[MainIbem]

They had a purpose for selling and that's what matters and if you think about it, the purpose is a good one moreover they didn't just sell out of panic. I believe they must have made enough profits before considering using some portions of their Bitcoin holdings to settle dividends and balance their sheet. Micro Strategy invest strategically and have gained a lot from buying and holding Bitcoin, people might be disappointed that they couldn't keep up with holding but it's their coin and they can't hold everything forever, taking some portions is not a bad idea.

[Humblevirus]

What we need to consider to determine whether the strategy is wrong or not is the price at which they accumulated their Bitcoin and the time they sold. If the price was higher than when they bought their Bitcoin, I would say that we can consider that as not a wrong strategy because they were already in profit.Coming down to when they rebought at a higher price than what they sold for, if there is a reason why they sold their Bitcoin, there is nothing wrong with that.

And looking at the post, I see that the company sold for a reason, and when the problem was solved, they came back to accumulate at a higher price than they sold for. They even haven't accumulated up to the number of Bitcoin they first accumulated. That is for now; if they have more funds, they will definitely continue to accumulate more Bitcoin.What people should understand is that we can't forever hold Bitcoin. Selling when we are in profit because we are facing some challenges and then trying to buy back at a higher price is not something I see as wrong.It is only when someone sells at lost and then buys back at a higher price that I see it as a very wrong idea and  I would say that doing that it because fear of losing.

[Cleanshit]

So they have the plans that if bitcoin continues to increase, their businesses stay strong and become larger.

When the price of bitcoin goes higher, Strategy's stock (MSTR) also rallies higher due to their voluminous bitcoin holdings. As the price of its common stock goes higher, they can easily issue some of its stock to users and use the cash raised from this sales to buy more bitcoin and push the price higher, thereby restarting the cycle.

This is why it seems they buy more when the bitcoin price is soaring and it would seem to a common man like they're loosing out while in reality the rising prices of bitcoin works to their advantage and provides more income to them which they reinvest into buying more bitcoin.

The risk when cycle stops working is the part people can easily overlook, let say MSYR rises because of its Bitcoin holdings and it allows strategy raises money to buy BTC, this cab create a very strong positive cycle. But same mechanism can work in reverse if Bitcoin falls heavily and investors losses confident in stock.

So I would say the interesting question it not only how much Bitcoin strategy can accumulate during a bull market. But if during a prolonged bear market the model can remain strong. Buying of Bitcoin when the prices are rising looks so easy but to be able to manage same structure when both the MSTR and BTC are falling it the real test.

[Nothingtodo]

In the case of Microstrategy, buying Bitcoin at a high price and selling it at a low price will not have much impact because the amount of Bitcoin in their company's holdings has been purchased through various DCA applications, due to which the total dividend of their company will not change in selling these few Bitcoins for the time being. Rather, they will buy at a high price and hold it for the long term, in which case their plan is long-term and it is according to the rules and resolutions of their company. However, for ordinary investors like us, there is no need to explain how to buy at a high price and sell at a low price.

[Taskford]

There is nothing wrong with their strategy because if you were there and you seen that you already make a small profit with your bitcoin hodlings and your prioritization is to pay all of your stake holders that trusted your business, id rather priority them because they trusted me and the business same thing like they did, they need to secure the trust of their investors to sustain the company and the business. Now if they seen profitable already and they head to the long term investment, buying back can be a good solution to accumulate more bitcoins.

Well their CEO defend their action and have explanation towards that decisions they made https://blockonomi.com/strategy-mstr-stock-ceo-defends-selling-bitcoin-low-and-buying-high

Somehow their point is valid, since if we look at their old purchase. They already made a profit even if they sold at $60k. Also for grabbing new funds they could able to start again or continue their accumulation, especially if they used fresh capital to continue their investment and consistent accumulation.