No microstrategy are buying bitcoin at market prices whilst selling as much stock as they like…ie issuing more and more stock. That normally makes your share price go down.
But the stock has risen 150% of its value to what it holds in BTC because the market is nuts.
And they can’t close the spread. So what do they do? Buy more.
And they aren’t the only ones doing
it.
BTC has been on a tear, but not a 500% per annum tear.
Whatever Microstrategy do, they do.
Michael Saylor probably gets that money back on just marketing.
And if you look back to four years ago, bitcoin was on a tear as well.
Same as 4 years before that.
And four years before that.
With every cycle, there are diminishing returns. So you don’t expect 500% gains because it is maturing with every cycle. It’s the same deal with shares. With every passing cycle, there is diminishing returns. For price to go from $5 to $10 is a different situation to $50 to $100 or $50k to $100k.
It’s a pretty consistent cycle when more buyers enter the market. Some get in very late.
Another tidbit…
Back in July the $2 billion dollars worth of bitcoin was put back into the market because of a German Government sale. Quite a bit of fear that this would cause the price to crash back down to $40k if not more.
But bitcoin had already been dropping since March.
So that much worth of bitcoin was feared to have flooded the market.
But bitcoin has a market cap of approximately $2 trillion dollars of bitcoin.
So that $2 billion is less than 0.5% of what was on the market. And it was brought onto the market gradually across multiple months.
Did it have an effect on the market? Definitely, but it didn’t crash as people were ‘fearing’. It was more marginal than that.
The market dropped to an intermediate low in August (that was on fears of the Japanese yen trade that crashed all markets) then bounced straight out of it.
After a two month tear between January and March when bitcoin doubled in price, it was bound to correct. Markets do this. All the time.
Just like this move that broke out in November (but started back in August), it’ll reach a point where it’s over stretched in price and needs to settle. It either corrects or tracks sideways for a few weeks. For the last month, it’s generally trickled upwards but pretty much remained in a range which is another form of correction. It’s likely to go nuts soon, then hit a peak and correct again.
It is the time of the cycle where there is great demand in bitcoin. So any bitcoin that is sold is picked up. There is plenty of liquidity to go around.
Do this same action in the year that it drops from its peak and you’ll see a harsher drop. Simply because there aren’t as many people buying. The longer you observe bitcoin, the more you realise that it takes quite a bit of demand to drive price up. And quite a bit of selling to drive price down. And every cycle to this point has had more people investing in it.
Onto Microstrategy though…
Microstrategy seems to have its own cycle too. That seems to peak between February and August after the US election. And it gives back a substantial percentage (60% to 80%) after its peak in the cycle. Sounds very similar to a bitcoin cycle. But it does seem that bitcoins peak occurs after Microstrategy’s peak.
In the last year, it would have been better to invest in Microstrategy than Bitcoin.
Bitcoin isn’t the be all and end all of investing.
There’s better returns in crappy useless coins as long as you’re looking. XRP is a good example that has had a 500% tear in the space of six weeks.
It’s more that it makes zero sense.
They have a free money making machine.
A company that does nothing really but issue more stock and buy more bitcoin.
With effectively a shell of a company around it.
You’re talking about multi billionaires. With different interests. And very many other investments that they do.
They live on a completely different playing field to us.
Any time Warren Buffet sells his stocks, there’s fears that it’ll tank the market. But he’s probably withdrawing from one investment to put into another. Or buying another house. Or whatever.
I’m sure whatever they are doing, they know the risks and they have a good understanding of what may or may not occur. Doesn’t mean they are right 100% of the time. They’ll make investment errors too. But obviously, across multiple investment they come out well ahead.
It’s a publicly listed company.
Whats remarkable about it is not that a billionaire has a stake in it, it’s what the company is doing and how the market is valuing the activity.
They are making money hand over foot out of thin air.
Are you able to buy coins in Monero or Zano in Australia?
supposedly more private than Bitcoin these days.
what are your thoughts on these coins?
Never heard of Zano. It’s not available on the exchange I trade, so I don’t monitor it. Looks like it’s been outpacing BTC which is a great sign. If I had it, I’d be doing what I’m doing with the ones I’m holding. Riding it into the next correction (hoping it doesn’t hit a stop loss) then seeing how it reacts out of it. If it hits its stop loss, I sell, then look for a re-entry in the following few weeks or rotate to another coin. Prefer doing that than riding it down to a 70% correction. Even if it means I’m buying higher than I sold or missing the eventual rebound.
Monero has been in my junk watch list since the start of the year and I doubt it gets its way out of it.
I’m sure it has some great bounces and performs for short periods of time though.
In general, any coin that only outperforms BTC for around a month, but the rest of the time is struggling to keep pace isn’t worth my time. I’d be better off investing in BTC more often than not.
Same deal with XRP, ADA, HBAR & LINK.
Doesn’t mean it can’t work in another strategy though.
Waiting around (or setting aside funds) for those few months can cause too many losses on moves that look like that one month move, but have no follow through until you get to the one magnificent gain. And if a cycle comes along that doesn’t produce that magnificent gain (or I miss it for whatever reason), you’re sitting there with losses still to make up for.
XRP up over 13% and rising
Keep going XRP!
Far out, I forgot that I have some of that.
I have always not had brain capacity to know how they work either .
I would say there is ia lot of dodgy Bitcoin traders ripping off people out there . how would one know where to go if you wanted to legit invest on some?
RLUSD officially launched this morning.
https://x.com/Ripple/status/1869011382852878592
From Ripple
“As it relates to the fact that we are launching RLUSD on both ethereum and the XRP ledger, that does generate more need for XRP as that bridge asset on the XRP ledger, and so more credible assets that trade on the decks that exist within the XRP ledger is good for XRP.”
You do your research.
And you do your own investing through an exchange that is set up for you and you alone to access. Some of the security is very ‘bank account like’ and is similar to buying shares through the Commonwealth Bank Investing platform than going through a broker.
Don’t send your bitcoin or alt coins to anyone. Your coins have a unique address, so you don’t give it to anyone.
Trade on a secure internet connection (not a free one whilst you’re in transit).
With exchanges, you have to be careful how to get your money onto them. Some banks block transfers and certain account numbers / pay addresses making it even more difficult to invest.
Just like every scam. You just be very careful with who or when you give your key info too.
I know a guy who has bought Monero for dark web transactions.
It’s definitely possible to buy.
Was on the train yesterday and some oldies were talking crypto.
This lady has bought BTC at I think over 100kUSD a coin.
I don’t know but she was down. I can’t think of it being a great time to buy these things
Two sides to every trade. Highly volatile things have this thing called downside.
Crypto has huge downside risks.
Sounds like she just bought without a plan.
Which usually shows itself out within a week or so after a trade.
She’s probably put too much into the investment too.
I suspect she bought at $100k assuming it’ll shoot off again into $130k just like the last move in November. This is possible (I actually think there’s a big move between now and mid January), but sometimes, it just needs time and trying to judge the timing is difficult. And of course, you also could just be wrong about it.
Even though crypto is volatile, it doesn’t mean quick moves are expected every day.
If she is buying now to sell in January, I think she is more likely to come out with a small gain depending on which side of the correction she sells but will probably still outperform some other Aussie stocks over the same time period.
If she is buying now to sell in March / April, I think she is more likely to come out well from it than not. and probably outperform a very high majority of Aussie stocks over that same time period.
If she is buying now to sell in 4 years time (and probably thinking this thing will reach $1mil by then) then I think she’ll be disappointed but still more likely to come out well from it.
Yes, there are risks. That is a big part of trading.
And there can be massive drawdowns in crypto.
The safest crypto to trade is Bitcoin, so if that’s troubling you, then it’s not worth even contemplating other crypto.
But if you are prepared for them and have a plan (i.e. I’ll exit and cut my losses at $[insert price here]) then you are will minimise your losses and won’t be so devastated.
Of course, if you put your ‘stop losses’ too close to the current price, you can witness your stop being fired and this thing take off for a quick 30% gain. Sit through enough of those and you’ll start going through conspiracy theories how it is corrupt and everyone is against you, etc.
Most people just invest without really thinking much.
That’s why the majority lose their money in crypto.
Usually a mix of not knowing what to expect, investing too much, having unrealistic expectations, not understanding where they are in the cycle, thinking things will always be great, getting in far too late on a move and not having an exit plan (which includes both positive and negative gains) and not really having a strategy (what entry and exits do you use).
And of course the kicker…
Not even backtesting their strategy to see how it actually works on crypto during similar parts of previous cycles and seeing what the drawdowns are, how many trades are positive, do you end up with a particular result. Then tweak it again to get better results that you can manage. Then actually execute the strategy live without letting your ‘feelings’ get in the way and going off strategy and trying to buy the next big thing.
I’ve had a friend ask me if he should invest in a particular coin (cannot recall its name). All I asked is what does he like about it. He said, because he read somewhere that it could be the next bitcoin. No analysis, not entry or exit, not sure when to expect these returns, etc. I told him it’s unlikely those coins will be the next bitcoin and if it does you’ll need to hold it for 12+ years and you’ll need to watch it’s value drop by 80% every 4 years. Just take a look at Ethereum. It’s been around since 2015 and gone from $1 to $1.4k. Since 2017 it has not even come close to out pacing Bitcoin long enough to outperform it.
He still thinks he might find the one needle in a haystack that goes from $1 to $100k just like bitcoin. There’s probably a better chance of winning Tattslotto.
It’s a great time to buy crypto. As long as you have a plan, know what to expect and have realistic goals. In my opinion, doing this takes around four to five months to strike the right balance for the way you wish to trade, so if you aren’t ready for it, then I’d say it isn’t the right time, because by the time you find something that suits your temperament and lifestyle, the cycle will likely be over or you’ll be buying to close to the top of the cycle. It may be best to just sit, watch and wait for the next cycle.
@Blummers32 appreciate you taking your time to post in this thread mate, clearly someone well informed and I’m certain your posts are helping many who stop by this thread.
There seems to be good long stretches where the excitement goes out of crypto. Eg BTC or ETH aren’t doing much
I’ll have a dabble when the prices look boring. Could be at any value.
Seems to me there is no real way of saying what something should be worth.
When it looks like things aren’t moving much is generally a good time to buy. You are getting it before a major move (up or down).
It is worth what someone is willing to buy or sell it for. A year ago it was worth $43k. A month ago, it was worth $94k. Today it is worth $101k. The worth will fluctuate.
There’s really nothing special about what it is ‘worth’.