MSTR -- To get out or not...

johnarb said:
Why not?

Top 300 of the biggest companies in the US by market cap, profitable for consecutive quarters...

There are zombie companies still in the s&p 500
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Never will this company ever be in the s&p .....I'm shocked they stuck SMCI in there...
 
johnarb said:
It would explain why MSTR shot up on Friday while bitcoin was down big
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Let me know if this also makes sense. I saw on The Bitcoin Layer, Caitlin Long discussed how she thought or maybe heard that right now, its difficult to hedge out exposure during the day by money makers. They were discussing why the miners go down when bitcoin is going up, and it was suggested that in some way, they were selling the miners as a hedge of some sort. So while everyone expects the miners to go up, they in fact are going down because there is too much selling, but for clearly reasons most would not suspect. I wonder if MSTR could also be used in some complicated and interlinked trade which would make the price do unexpected things.
 
johnarb said:
TradFi has no idea what Saylor is doing...
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  • mstr is farming bitcoins

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tl;dr (my pov as an ex-bitcoin miner from a long time ago, defi yield farmer ,currently)

A bitcoin miner may spend a hundreds of millions even a billion $ on infrastructure, buildings, procuring asics, plus the operating costs mainly from cost of energy to run the asics, and cooling, then they earn newly-created bitcoins as rewards plus tx fees

None of the miners can come close to accumulating 200,000 coins as the bitcoin mining is very competitive

The buildout may take a long time, due to waiting for hardware to be available from suppliers

This is not what mstr is doing as mstr is not involved in generating new bitcoins per the mining process...

As a crypto defi yield farmer, I earn tokens by using our crypto assets, i.e. staking or joining a liquidity pool to earn fees

When I say mstr is farming bitcoins, it's using the tools of traditional financial system, i.e. issuing debts, selling company shares, or using profits from its business operations to purchase existing bitcoins

It's been very effective and mstr has acquired more than 200,000 bitcoins to date. They just issued another debt and the demand is overwhelming (oversubscribed) again

Given the high demand for mstr debt and equities, this will continue, especially since the mstr share price keeps going higher, everyone is rewarded, shareholders and debt buyers, alike

mstr will continue to farm more bitcoins for their treasury


NoahA said:
Jesus.. another excellent point John! You're absolutely right. The fastest way to accumulate bitcoin right now is borrow USD and buy it. When bitcoin goes up 10x, this trade will have paid off incredibly, but no longer be as attractive to put on anymore. Now is the time to borrow fiat if you're a major corporation and can pull it off. The miners are like turtles in this race. I am having trouble understanding how the miners are a good bet when you consider how competitive this space is.
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Yup! Someone has to try mining for bitcoins before they can appreciate how mstr is gaming the system to acquire so many bitcoins

And none of the ETF's are a good comparison to mstr since the ETF's do not own the bitcoins but the buyers of the ETF's own the bitcoins

mstr and bitcoin miners own the bitcoins they acquired

Bitcoin mining was very easy in the first 4 years, during the time Satoshi was still actively communicating, the reward per block was 50 bitcoins and the network hash was very low unlike today over 600 Million Trillion hashes per second

and we're about to have the 4th halving making it twice as difficult for the bitcoin miners to acquire the same quantity of bitcoins as they are able to now

6.25 btc will be reduced to 3.125 btc block reward next month
 
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johnarb said:
None of the miners can come close to accumulating 200,000 coins as the bitcoin mining is very competitive
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Jesus.. another excellent point John! You're absolutely right. The fastest way to accumulate bitcoin right now is borrow USD and buy it. When bitcoin goes up 10x, this trade will have paid off incredibly, but no longer be as attractive to put on anymore. Now is the time to borrow fiat if you're a major corporation and can pull it off. The miners are like turtles in this race. I am having trouble understanding how the miners are a good bet when you consider how competitive this space is.
 
johnarb said:
And none of the ETF's are a good comparison to mstr since the ETF's do not own the bitcoins but the buyers of the ETF's own the bitcoins
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ETF shareholders, like MSTR shareholders, own the shares, not the coins.
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