It depends on your vision of 'the case for bitcoin'. To me, it is absolutely the case. You collateralize your debt with bitcoin, to buy more bitcoin. Using your pet rocks to create more pet rocks, creates more scarcity, price goes up. It is a perfect circle. Saylor is a genius to see that, but he isn't the only one.
The problem though is that long term, I'd argue that ETH is playing this game a lot better. If you can mentally get past the DAO failure and whatever other drama, programmable money, is the absolute future, especially since they solved the energy usage issue, and soon the scaling issues.
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.
The usual stuff. Political and corporate bribery and extortion. Bitcoin is great for that. Made all the better by the fact that many bribe recipients cannot access their Bitcoins in the current system due to government surveillance of exchanges. This creates an incentive for insiders to take down the current socio-economic system. Just as a short seller has an incentive to see the company crash. They will have no issue accessing their Bitcoins once current governments have collapsed or become sufficiently corrupt.
I've witnessed crypto regulators behave in corrupt ways, but it's impossible to prove bribery until they move or sell their ill-gotten crypto. Because, with crypto, you can receive tokens without your own approval. Someone could send you the passphrase of a wallet containing millions of dollars worth of Bitcoin, it could end up in your email spam folder and you could memorize it and, if ever questioned about it, claim you don't remember seeing that email. There would be zero evidence.
Yet if you remember the passphrase, the Bitcoin is yours.
The market cap of Bitcoin is 99% not self custodial with keys people still have control of, not counting Satoshi'd hoard that might or might not be accessible. All the new ETF interest in Bitcoin is just digital beanie babies. Without the tradfi system, there would be almost no demand for Bitcoin, which completely undermines its alleged purpose.
If you want cryptocurrency, Bitcoin isnt it.
It's not possible to start a new currency system without reference to, dependence upon, and transfers with, the existing currency system - especially given that the existing system is so entrenched due to its extensive history.
Given Bitcoin's reason for existence, it's obvious for another reason that "without the the tradfi system, there would be almost no demand for Bitcoin": if everyone trusted that tradfi was a good system and working fairly for all members of society then bitcoin wouldn't have a reason to exist.
Bitcoin, like Trump's popularity, is an FU to a system that's reaching or reached a critical mass of people lacking trust in it.
And that doesn't mean it's good or bad or better or worse, what it means is that people are looking for an alternative to the perceived hopelessness of their futures if they 'stay the course'.
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.
Inclusion to S&P500 is a committee decision, not based on purely market cap. It may not happen for MSTR.
MSTR is essentially a leveraged, debt laden commodity trust rn, with a highly volatile commodity making up most of its balance sheet.
Their premium to NAV is indeed very high, and makes you think why would anyone buy that vs a BTC ETF. Perhaps if you think BTC goes a lot higher (and stays there) their ongoing leverage and the premium you pay for it now makes sense? Their debt is pretty well structured - v. low interest and matures a long time from now, but remains to be seen how long he can keep issuing it.
He also keeps saying he's never going to sell BTC, but I don't see how he's going to service his debt eventually if he doesn't sell. Unless he starts market making with the treasury or somehow putting it to work
I suspect what you are missing here is that both sides just "get it", they disagree what "it" is. I don't find the anti-crypto folks to be particularly more or less screamy than the pro-crypto folks, for what it's worth.
to be fair, one side (people with coins) is highly incentivised to preach the gospel. people seem to generally have no shortage of opinions about money/wealth, and hot takes about the topic du jour
And the other side (people with fiat) are incentivized to preach that gospel as well, as the value of their tokens continues to decrease relative to crypto.
Disclaimer: I actually dislike bitcoin (and other proof of work cryptos) very much, but the jury's still out on which side is more correct in their criticism of the other.
and the people without much of either token also have an opinion :)
PoS ledgers seem like a better design, but they alone don't solve very uneven/concentrated token distributions that you end up with every monetary system
Yeah, crypto maxis (and especially bitcoin maxis) really do talk about it like it's the next coming of Jesus.
Crypto absolutely will not solve that specific problem of any monetary system. It may solve some others though, in addition to introducing many novel problems
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.
None. Its a scarce resource that has been mutually agreed upon to be desirable.
Much like gold or diamonds. Sure they have some limited use in non jewelry applications but nothing that justifies their prices vs the existing supply besides people just agreeing they are valuable.
As a store of value though vs gold it has more positives. Much easier to transport a billion dollars worth of btc than gold.
Much easier to self custody.
Truly limited supply, they pull more gold out of the ground every day.
The world literally just got together and decided BTC is what they want and the price reflects that. Its a fascinating case study just in that regard.
The video is here: Page is terrible, video is about 1/3 down
To me it's never been that "intrinsic value" of Bitcoin makes much sense, but that it holds up a mirror to the incumbent system and how little that makes sense either!
Credit default swaps are not magic; if you can correctly predict future default risk you can use CDSes to take money from people who predict wrong (and this also provides information to the market, encouraging the underlying to be more accurately... never mind).
Totally valid, but more and more people want it every day and are buying it.
The new etf's have provided them with an alternate method of doing so and are currently the most successful ETF launch of all time. The daily demand of the ETF's far outstrips the number of new coins generated weekly. Add in the fact that that newly generated supply is getting halved in a few weeks and you have a good outlook for BTC pricing.
> more and more people want it every day and are buying it
This is incorrect. From Coinbase SEC filings, retail trade is 1/8 of what it was in 2021, last time the price was this high.
Even as the price has risen over the course of the past year, less and less people have wanted bitcoin every day. We have the numbers on this from the largest actual-dollar crypto exchange.
Miners have hoarded coins since 2021 because if they sold them the price would cash. They took out loans against their mark-to-market value instead. (Two such lenders were Silvergate Bank and Signature Bank.) When you see sudden multi-thousand dollar crashes in the bitcoin price, it's often a miner having to dump.
The ETFs have taken in $10b net in their entire existence, and a lot of that seems to be churn from other bitcoin-exposed securities.
It's not clear you're informed on the market you're expounding on at such length.
Diamonds are not a store of value. Diamonds are a rare and well marketed jewelery item. Gold jewelry costs substantially more than its melt gold value, but stores value in medallion and bullion form.
Self custody is part of why Bitcoin is valuable -- self custodians deflating it by losing their keys. The other part is speculative hype.
I’d add that it has a huge decentralized network of purpose-built hardware securing it, and a huge swarm of decentralized nodes enforcing its rules, and making it hard for a small group of people to change its rules. That’s worth something, it makes it closer to something like gold, which has hard natural physical constraints, but without some of the limitations of physical goods (ease and speed of transferring).
What is the the underlying value if a dollar? Or euro?
On first sight, there is none. But when the IRS knocks at your door to collect taxes, you will need to cough up dollars. Or euros when you live in europe. Rubel, yen or gold won't do.
That provides the underlying value of the dollar. Or the euro.
Now what about BTC ?
When the ransomware hacker knocks at your door, you'll have to get bitcoin. Dollars or rubel won't do. That provides the underlying value of the bitcoin.
Bitcoin can be used to pay transaction fees for permanent storage, timestamping, and distribution of arbitrary data - typically but not necessarily transaction data - without reliance on a trusted third party.
Maybe that's circular. Some people say the US dollar has value because it can be used to pay taxes.
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.
Completely valid as well. Makes a lot of sense to diversify, no need to be all in.
With that said; there are few other assets that have accumulated this much value over their initial existence. BTC market cap just passed silver. Gold is a 10x away. So yes it absolutely has volatility but the greater trend is exclusively up with little sign of stopping.
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.
Buying at $10k was foolish, yet here we are. The point being that people will say that at any price point, even though the price always goes beyond all time highs during every bull market.
Bitcoin tends to have severe, sudden crashes after going up a lot, see May 2021 or Dec 2021. I would rather keep cash on sidelines, imho. Already crashing a lot today.
I've been in it since 2013, so yea... going back to only 2021, isn't really interesting to me.
One way to hedge against those crashes is to use your BTC as collateral to borrow against it, and then find ways to use those borrowed funds to compound your earnings. For example, you can borrow ETH, stake that for ~4%. Of course, you need to maintain your ratio, but that's actually quite easy. Worst case you just unstake your ETH, pay back your loan and you're out... or you add more BTC to up your ratio.
This way you're protected against crashes and disconnected from the actual value of the underlying asset (BTC). You're making that ~4% regardless of what the price of BTC is doing. Saylor is playing these sorts of financial games (probably not with ETH, but with other assets). This is how he has continued to double down on his purchases, without having to sell.
Today is just noise and a terrible example to try to make, which undermines your position on things. It went down more than that after the ETF and then boomed upwards. Zoom out on the chart a bit instead of looking at these micro events.
You've been dumping on BTC in this whole thread. You've got a lot of karma here, but your vision and hatred of crypto are distorting your views. My suggestion would be to spend some time understanding the macro economics a bit more.
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?
I think you're taking the question too literally. One can surely make the bet that two securities will move in opposite directions, with bounded loss potential, using things like option spreads.
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.
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.
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.
Unless there is massive inflation how would that even be possible? At $1 million it becomes close to the value of all gold combined, the GDP of the United States or the market cap of the entire Nasdaq. At that point, where does the money come from to buy more?
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[ 5.4 ms ] story [ 146 ms ] threadThe problem though is that long term, I'd argue that ETH is playing this game a lot better. If you can mentally get past the DAO failure and whatever other drama, programmable money, is the absolute future, especially since they solved the energy usage issue, and soon the scaling issues.
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.
Could you elaborate on what you mean and the mechanism for this?
I've witnessed crypto regulators behave in corrupt ways, but it's impossible to prove bribery until they move or sell their ill-gotten crypto. Because, with crypto, you can receive tokens without your own approval. Someone could send you the passphrase of a wallet containing millions of dollars worth of Bitcoin, it could end up in your email spam folder and you could memorize it and, if ever questioned about it, claim you don't remember seeing that email. There would be zero evidence.
Yet if you remember the passphrase, the Bitcoin is yours.
Given Bitcoin's reason for existence, it's obvious for another reason that "without the the tradfi system, there would be almost no demand for Bitcoin": if everyone trusted that tradfi was a good system and working fairly for all members of society then bitcoin wouldn't have a reason to exist.
Bitcoin, like Trump's popularity, is an FU to a system that's reaching or reached a critical mass of people lacking trust in it.
And that doesn't mean it's good or bad or better or worse, what it means is that people are looking for an alternative to the perceived hopelessness of their futures if they 'stay the course'.
(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.
MSTR is essentially a leveraged, debt laden commodity trust rn, with a highly volatile commodity making up most of its balance sheet.
Their premium to NAV is indeed very high, and makes you think why would anyone buy that vs a BTC ETF. Perhaps if you think BTC goes a lot higher (and stays there) their ongoing leverage and the premium you pay for it now makes sense? Their debt is pretty well structured - v. low interest and matures a long time from now, but remains to be seen how long he can keep issuing it.
He also keeps saying he's never going to sell BTC, but I don't see how he's going to service his debt eventually if he doesn't sell. Unless he starts market making with the treasury or somehow putting it to work
it’s such a curious litmus test for something but I’m not sure exactly what.
religion
politics
they work because people believe they work
N may be five to seven digits.
Disclaimer: I actually dislike bitcoin (and other proof of work cryptos) very much, but the jury's still out on which side is more correct in their criticism of the other.
PoS ledgers seem like a better design, but they alone don't solve very uneven/concentrated token distributions that you end up with every monetary system
Crypto absolutely will not solve that specific problem of any monetary system. It may solve some others though, in addition to introducing many novel problems
(I think) Coindesk is one of the better ones...
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.
As a store of value though vs gold it has more positives. Much easier to transport a billion dollars worth of btc than gold.
Much easier to self custody.
Truly limited supply, they pull more gold out of the ground every day.
The world literally just got together and decided BTC is what they want and the price reflects that. Its a fascinating case study just in that regard.
The video is here: Page is terrible, video is about 1/3 down
https://finance.yahoo.com/video/buying-bitcoin-buying-nyc-ap...
This is incorrect. From Coinbase SEC filings, retail trade is 1/8 of what it was in 2021, last time the price was this high.
Even as the price has risen over the course of the past year, less and less people have wanted bitcoin every day. We have the numbers on this from the largest actual-dollar crypto exchange.
Miners have hoarded coins since 2021 because if they sold them the price would cash. They took out loans against their mark-to-market value instead. (Two such lenders were Silvergate Bank and Signature Bank.) When you see sudden multi-thousand dollar crashes in the bitcoin price, it's often a miner having to dump.
The ETFs have taken in $10b net in their entire existence, and a lot of that seems to be churn from other bitcoin-exposed securities.
It's not clear you're informed on the market you're expounding on at such length.
Further, the same has been true for the Argentinian Dollar for decades.
Many other currencies that I could name as well.
Self custody is part of why Bitcoin is valuable -- self custodians deflating it by losing their keys. The other part is speculative hype.
What is the the underlying value if a dollar? Or euro?
On first sight, there is none. But when the IRS knocks at your door to collect taxes, you will need to cough up dollars. Or euros when you live in europe. Rubel, yen or gold won't do.
That provides the underlying value of the dollar. Or the euro.
Now what about BTC ?
When the ransomware hacker knocks at your door, you'll have to get bitcoin. Dollars or rubel won't do. That provides the underlying value of the bitcoin.
Maybe that's circular. Some people say the US dollar has value because it can be used to pay taxes.
With that said; there are few other assets that have accumulated this much value over their initial existence. BTC market cap just passed silver. Gold is a 10x away. So yes it absolutely has volatility but the greater trend is exclusively up with little sign of stopping.
Not sure why it's a good long-term store. It requires electricity to exist.
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.
One way to hedge against those crashes is to use your BTC as collateral to borrow against it, and then find ways to use those borrowed funds to compound your earnings. For example, you can borrow ETH, stake that for ~4%. Of course, you need to maintain your ratio, but that's actually quite easy. Worst case you just unstake your ETH, pay back your loan and you're out... or you add more BTC to up your ratio.
This way you're protected against crashes and disconnected from the actual value of the underlying asset (BTC). You're making that ~4% regardless of what the price of BTC is doing. Saylor is playing these sorts of financial games (probably not with ETH, but with other assets). This is how he has continued to double down on his purchases, without having to sell.
Today is just noise and a terrible example to try to make, which undermines your position on things. It went down more than that after the ETF and then boomed upwards. Zoom out on the chart a bit instead of looking at these micro events.
You've been dumping on BTC in this whole thread. You've got a lot of karma here, but your vision and hatred of crypto are distorting your views. My suggestion would be to spend some time understanding the macro economics a bit more.
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?
yes because one of the legs can have unbounded losses
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...
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.
"Bitcoin has all the the metal's great attributes, but none of its problems."
Especially now that ETFs give access to Bitcoin to institutions that traditionally could not touch it.
Makes no sense to me.