At today's price, MSTR owns about $14B of Bitcoin and has a market cap of almost $30B.
Has anyone here actually used MicroStrategy, the product/service offering? Is the software company behind it worth the implied $16B, or is MSTR essentially just a Bitcoin ETF with a really bad fee ratio? (I’m not even counting the $2B debt on their books)
Would I be dumb to do a long BTC / short MSTR pair trade?
Accoding to the CEO (Michael Saylor) most of the price premium comes from institutions like pension funds not being allowed to directly hold BTC, but they are allowed to a ratio of the money in stocks. At the same time they need exposure to BTC as an independent asset that performs well (funds have performance mandates).
Of course now that spot ETF is approved it changes the picture somewhat, but it looks like MSTR is still needed as an institutional vehicle for wrapping BTC.
MSTR has had declining nominal revenue (let alone real-dollar) basically every quarter since 2014. [1]
Remember too that Saylor popped the 1999 tech bubble when he was accused by the SEC of cooking the MicroStrategy company books. Settled for millions dollars in fines, and should have at that point been banned from ever running a public company, but hey, this is America. When they restated their books, he lost more money in a single day than anyone in history. [2]
Not sure he's really someone to be taken seriously. He's shown some questionable judgement, to put it mildly. Desperation will do that to you.
Possibly the worst website I remember trying to read on mobile. Finding, reading and not loosing the actual text was a real challenge.. too bad, would have liked to know the content.
Cryptocurrency "news" websites are a new breed of awful combination of advertising monetisation and poor auto-generated AI interpretation trash (with awful grammar) shoved into whatever white-space is left over.
I always thought Saylor's liquidation would be the perfect reversal signal during the last bear market, but alas, it was FTX, and Saylor survived.
Of course, it's plausible that he'll take out some massive loans to buy Bitcoin at the top of this current bull cycle and get himself into trouble regardless. Perma-bears and perma-bulls are equally clueless in my book. It's just an admission you have no clue how markets work.
I had always thought of BTC in terms of an alternate currency but I watched a video yesterday with Saylor where he pitched it instead as a store of value. While the concept was not new to me, it was a really interesting video and he did a good job with it. BTC will not replace the dollar, but its probably going to eat gold.
My only issue with that is, it's behavior over the past 15 years seems to have a lot of interest rate risk built into. The thing about gold is historically it has been a store of value that is independent of interest rate risk, and I'm just not seeing much evidence that BTC is also orthogonal to interest rates. When rates went up, BTC went down. When interest rates were low, BTC also mostly climbed. If I want exposure to the interest rate + some extra exposure to other things I can just invest in equities.
Its physical durability is established. You'll have no problems dealing with a 150-year-old coin, but I could see even things like "paper key/secret" storage falling apart if the appropriate ecosystem isn't there to restore access.
Its volatility is far less than BTC. The dollar still does better by that metric in non-dramatic times, but there's the implicit "if you're looking for alternative value stores, you've probably already turned up your nose to the dollar."
Offline cash in and out is still easier. Most communities have a coin dealer who will happily exchange dollars for sovereigns, or back. Yes, the spread is probably large, but I'd trust a cash-in-hand transaction with a local dealer a lot more than an exchange who will suddenly go into "we no longer offer fiat withdrawls, have some HappyFunCoin instead mode.
I might be wrong, it can always keep going up, but is it wise to make a big purchase of an asset that has just reached an all-time high? Especially given how volatile BTC is - it could possibly go to 200k or higher, or it could possibly lose 70% in a year like it did in 2022.
You should see the tweets of these guys. Not only they expect it to always go up, they think this is still in early stages and the price of 1 BTC could go to millions of USD.
There's some hay in the cryptocurrency space right now about how MSTR's market cap merits its inclusion in the S&P 500, which some think will cause a "flywheel".
(1) Index funds purchase MSTR shares, driving up the price; (2) thus allowing Saylor to issue more debt to buy BTC, which drives that up; (3) MSTR shares appreciate due to its BTC holdings; (4) go to step 1 as funds need to rebalance and add more MSTR shares.
The weak points to this idea are definitely step 2 and even 3. MSTR won't be able to keep finding entities to buy its debt indefinitely, and MSTR is already trading well above what its BTC holdings' appreciation would justify, so there's some obviously unsustainable mania going on.
The fiat scheme is the bigger ponzi. It's already the case that to earn any decent income in the fiat ponzi, one must have special social connections to business leaders and/or politicians. It's just like under communism.
I don't even like Bitcoin and don't own Bitcoin because I have ethical concerns about it. Bitcoin promotes corruption of the socio-political system via extreme, massive-scale tribalism. That said, it's probably the lesser of two evils.
As an outsider, it's ironic to witness fiat proponents neglect the power of corruption which they themselves have been benefitting from to a far greater extent than Bitcoiners.
The side which can exert the most corruption (the will of their tribe), most quietly, will win. Likely Bitcoin since it has the support of the masses and business leaders. Fiat proponents can only blame themselves. They're the ones who made Bitcoin possible with their global ponzi.
I don't like the current system and I also don't particularly like where it's going but the trajectory is clear.
[+] [-] paulgb|2 years ago|reply
Has anyone here actually used MicroStrategy, the product/service offering? Is the software company behind it worth the implied $16B, or is MSTR essentially just a Bitcoin ETF with a really bad fee ratio? (I’m not even counting the $2B debt on their books)
Would I be dumb to do a long BTC / short MSTR pair trade?
[+] [-] xiphias2|2 years ago|reply
Of course now that spot ETF is approved it changes the picture somewhat, but it looks like MSTR is still needed as an institutional vehicle for wrapping BTC.
[+] [-] unknown|2 years ago|reply
[deleted]
[+] [-] arcticbull|2 years ago|reply
Remember too that Saylor popped the 1999 tech bubble when he was accused by the SEC of cooking the MicroStrategy company books. Settled for millions dollars in fines, and should have at that point been banned from ever running a public company, but hey, this is America. When they restated their books, he lost more money in a single day than anyone in history. [2]
Not sure he's really someone to be taken seriously. He's shown some questionable judgement, to put it mildly. Desperation will do that to you.
[1] https://www.macrotrends.net/stocks/charts/MSTR/microstrategy...
[2] https://www.nytimes.com/2000/12/15/business/microstrategy-ch...
[+] [-] paulpauper|2 years ago|reply
yes because one of the legs can have unbounded losses
[+] [-] rand846633|2 years ago|reply
[+] [-] BLKNSLVR|2 years ago|reply
(I think) Coindesk is one of the better ones...
[+] [-] lend000|2 years ago|reply
Of course, it's plausible that he'll take out some massive loans to buy Bitcoin at the top of this current bull cycle and get himself into trouble regardless. Perma-bears and perma-bulls are equally clueless in my book. It's just an admission you have no clue how markets work.
[+] [-] wonderwonder|2 years ago|reply
[+] [-] mandevil|2 years ago|reply
[+] [-] hakfoo|2 years ago|reply
Its physical durability is established. You'll have no problems dealing with a 150-year-old coin, but I could see even things like "paper key/secret" storage falling apart if the appropriate ecosystem isn't there to restore access.
Its volatility is far less than BTC. The dollar still does better by that metric in non-dramatic times, but there's the implicit "if you're looking for alternative value stores, you've probably already turned up your nose to the dollar."
Offline cash in and out is still easier. Most communities have a coin dealer who will happily exchange dollars for sovereigns, or back. Yes, the spread is probably large, but I'd trust a cash-in-hand transaction with a local dealer a lot more than an exchange who will suddenly go into "we no longer offer fiat withdrawls, have some HappyFunCoin instead mode.
[+] [-] sailfast|2 years ago|reply
Not sure why it's a good long-term store. It requires electricity to exist.
[+] [-] 7e|2 years ago|reply
[+] [-] joegibbs|2 years ago|reply
[+] [-] b0sk|2 years ago|reply
[+] [-] ur-whale|2 years ago|reply
Especially now that ETFs give access to Bitcoin to institutions that traditionally could not touch it.
Makes no sense to me.
[+] [-] mise_en_place|2 years ago|reply
[+] [-] paulpauper|2 years ago|reply
[+] [-] paulpauper|2 years ago|reply
[+] [-] kinghajj|2 years ago|reply
(1) Index funds purchase MSTR shares, driving up the price; (2) thus allowing Saylor to issue more debt to buy BTC, which drives that up; (3) MSTR shares appreciate due to its BTC holdings; (4) go to step 1 as funds need to rebalance and add more MSTR shares.
The weak points to this idea are definitely step 2 and even 3. MSTR won't be able to keep finding entities to buy its debt indefinitely, and MSTR is already trading well above what its BTC holdings' appreciation would justify, so there's some obviously unsustainable mania going on.
[+] [-] rwaksmunski|2 years ago|reply
[+] [-] arno1|2 years ago|reply
[+] [-] jongjong|2 years ago|reply
I don't even like Bitcoin and don't own Bitcoin because I have ethical concerns about it. Bitcoin promotes corruption of the socio-political system via extreme, massive-scale tribalism. That said, it's probably the lesser of two evils.
As an outsider, it's ironic to witness fiat proponents neglect the power of corruption which they themselves have been benefitting from to a far greater extent than Bitcoiners.
The side which can exert the most corruption (the will of their tribe), most quietly, will win. Likely Bitcoin since it has the support of the masses and business leaders. Fiat proponents can only blame themselves. They're the ones who made Bitcoin possible with their global ponzi.
I don't like the current system and I also don't particularly like where it's going but the trajectory is clear.
[+] [-] alchemist1e9|2 years ago|reply
it’s such a curious litmus test for something but I’m not sure exactly what.
[+] [-] duckman1|2 years ago|reply
[deleted]
[+] [-] bcrl|2 years ago|reply
[+] [-] BLKNSLVR|2 years ago|reply
[+] [-] npoc|2 years ago|reply