Monitoring the Crypto Bubble

Where do you think we are in the crypto bubble?

  • Total voters
    146
IPDA said:
Look at the drop from March - April through intermarket analysis. It shows Microstrategy making higher highs, but Bitcoin making lower highs.
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I don't know what intermarket analysis is but the weekly price chart doesn't show that. I see periods (Mar - May, May - Jul and Jul - Sept) of the share price of MSTR falling interspersed with short bounces back to the previous level with a fairly consistent price for BTC during that whole time.

IPDA said:
If what you're saying is true, would that not indicate that one of the largest buyers of Bitcoin is pulling out? Or at the very least taking profits as he believes the price has risen comfortably enough to sell.
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Are we talking one of the largest buyers of MSTR shares, convertible bonds or BTC? Or are you referring to MSTR itself?

I think the Forward Guidance team were referring to the converts, maybe shares but definitely not BTC itself.
 
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The Board of MSTR measures the performance of the company in BTC/share. Acquisitions of BTC are the main objective which could mean the price per share for MSTR is of secondary importance.

In related news:

Amazon Urged to Buy Bitcoin as Microsoft Shareholders Consider BTC Proposal
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https://decrypt.co/295656/amazon-shareholders-bitcoin-treasury-microsoft

The Microsoft meeting is Dec 10 US time. Neither company if it proceeds to buy BTC would adopt the same strategy as MSTR as their revenue base is built on the services they offer whereas MSTR's revenue base is built on its BTC Treasury.
 
IPDA said:
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Up to about 8:40 good explanation of how it works. But he's lost the plot on how dilution affects how much value a shareholder has in the company.

Yes, issuing converts to new investors or even current ones means that there is the potential for dilution down the track, but no, it doesn't benefit the early investor at the expense of the latter as the wealth or benefit to individual investors is not determined by how long they've been shareholders for but by how much claim they have to the company's assets and revenue ie it's based on how many shares they own.

I stopped watching from then on as his premise was faulty.

Edit to add: I had a quick scan of some of his other videos, dude doesn't have the greatest grip on crypto.

I got a chuckle out of this one: Crypto Currency Fallacies . I thought it was pretty funny that his argument against crypto relied on some origin of money fallacies amongst other things.


 
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pmbug said:
$MSFT shareholders vote against BTC investment proposal.
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Shareholders exercising prudence and signalling to the Board that it should concentrate its efforts on pursuing strategies that enhance its current position of strength in the marketplace rather than speculation.

It is the responsibility of the management team to speculate on the behavior of the macroeconomy and hedge away risk when appropriate. Companies have been doing this for decades. For example, multinational firms will often use futures contracts to hedge away foreign currency risk. This is normal. The question is, when are companies engaging in speculation as opposed to exercising a prudent hedging strategy?
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Nanalyze, November 2020
 
Depending on timeframes maybe some tinkering of the chart reflecting the support following the gap in about April 2023 and we could be in the zone now????

BTC.D_2024-12-11_08-35-37.png

Decisions, decisions.
 
mmm....shiney! said:
Shareholders exercising prudence and signalling to the Board that it should concentrate its efforts on pursuing strategies that enhance its current position of strength in the marketplace rather than speculation.



Nanalyze, November 2020
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That is True. Michael Saylor should diversify the Treasury. Invest in Tesla.
 
markcoinoz said:
That is True. Michael Saylor should diversify the Treasury. Invest in Tesla.
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Do you think he cares? Is not his money to worry about.
All shares are not even secure as they are not registered in US.
Soon will hear another FTX, Luna and following the list of 3arrows, celsius plus the rest of it.
How many have failed and how many have been dragged down with it.
 
More discussion on MSTR:


I'm so lapping up this negativity around it (it reminds me of the early days of crypto) that I reckon i"m going to jump in and get me some shares. Just have to work out at what price I'm willing to buy them at.
 
mmm....shiney! said:
How does buying equities enhance shareholder value more so than buying BTC?
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BTC, Tesla and Micro Strategy operate in cycles.
BTC and MSTR follow the same cycle, except for MSTR can easily become much more overbought during the Bull market than BTC.
Tesla does not follow BTC or MSTR cycle. Just like the Gold to Silver Ratio, you can easily swap between BTC and Tesla based on their Ratio.
You could do the same with MSTR.

I know Michael Saylor has said he is never going to sell his Bitcoin.

Not so sure it is the perfect set-up, or the perfect solution by never selling an investment,or at least having some diversification.
To be blunt, Michael Saylor might have one of the largest holdings in MSTR. However, look at his average cost over the course of all the BTC purchases.
IMO, his most recent purchases of BTC with an AVG Cost of $98,783 per/BTC is starting to weigh on the heavy side of his overall purchases.
I do not see his strategy as being sustainable in a full on Crypto Bear Market when he is so heavyweight.

https://finance.yahoo.com/news/microstrategy-purchases-21-550-bitcoin-070558601.html

With his strategy, can he weather the storm during a major Bear Market when it eventually comes? We shall see.
One thing I am confident in, the next Crypto Bear Market will be a doozy and the Stock Market won't be immune.
Overall, I am more confident in the longterm strategy of Tesla than Microstrategy, even though Tesla will take a big hit
in a major downturn of the stockmarket.

Onwards and upwards into 2025.
 
Ok, firstly the admin and shareholders would weigh up the return from purchasing BTC v the return from purchasing some form of Tesla security. At the moment and for the foreseeable future the return on BTC is likely to be multiples of any alternate asset. And yes, they're unrealised gains until they decide that they're going to have to or want to return something to shareholders down the track. Furthermore, current MSTR shareholders could just buy TSLA themselves if they want to hedge the cycles, rather than have MSTR buying it for them.

Secondly, the buyers of these bonds don't want to buy converts in a company that is a Tesla proxy, they could also just buy TSLA directly. For whatever reason they can't buy BTC or its ETFs directly, but they want BTC exposure and they want it juiced with the volatility of the MSTR share price. They can buy stocks in companies so they buy the converts offered by MSTR.

Now the way I understand it currently is that by issuing convertible bonds at a zero premium, it costs nothing for the company to borrow money to buy BTC. Saylor is converting the future price of MSTR shares into BTC at today's price. This is how he's leveraging the current share price. There's stuff around soft bond protection etc which I'm still getting my head around, but essentially, if all the bonds are converted on maturity, then all MSTR's debt is wiped. The returns have the potential to be huge but so do the risks.

So, back to what we're talking about, a company like MSFT thats value is determined by its share of the marketplace wouldn't risk multiples of its value on such a strategy, it's not prudent ie it puts at risk the value of a company that makes a huge amount of money in the marketplace. MSTR has taken the risk because its value is not measured by its returns as a software company in the marketplace.
 
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markcoinoz said:
Both good points Shiney.
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That's why Saylor refers to MSTR as a BTC "refinery".

refinery
IPA guide
Other forms: refineries

A refinery is a facility where raw materials are converted into some valuable substance
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https://www.vocabulary.com/dictionary/refinery#:~:text=A refinery is a facility,substance by having impurities removed.

Of course, the presumption is that BTC has value in the first place. For someone who doesn't agree with that premise then of course this whole concept is just a scam. See the dude in @IPDA's link above by way of example in #2904.
 
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Really good and informative video about tether... If there is a run on liquidity for whatever reason, I believe Bitcoin will crash very very hard. It is incredibly shady that Tether has never been audited, and that they say in their own terms that they do not reserve the right to basically provide the funds.
 
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