Morgan Stanley Increases its Stake In BTC HOLDer MicroStrategy to 10.9%

Morgan Stanley Increases its Stake In BTC HOLDer MicroStrategy to 10.9%

Banking giant Morgan Stanley has jumped on the Bitcoin bandwagon via MicroStrategy Inc. by increasing its stake in the company to more than 10% late last year.

According to a filing with the US Securities and Exchange Commission (SEC) on Friday, the investment management arm of the bank held 792,627 shares of MicroStrategy by the end of December.

Back in Q3 2020, the company owned 142,908 shares, representing a 360% increase in position.

Morgan Stanley’s 10.9% stake had a value of about $420 million based on the day’s closing price of $531.64. MicroStrategy (MSTR) shares have surged 330% in value in the past five months, to a level last seen in April 2000.

This wild rally in MSTR share prices has been driven by the company’s chief executive officer Michael Saylor’s big bet on Bitcoin. As of Dec. 21, 2020, the company holds an aggregate of 70,470 bitcoins, worth $2.85 billion at a current BTC price of over $41,200.

Other top holders of MicroStrategy include First Trust Advisors, BlackRock Inc., and Vanguard Group.

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Author: AnTy

MicroStrategy Pushes its Bitcoin Ownership well over $1 Billion with Latest Round

MicroStrategy completed the sale of its $650 million convertible senior notes with an interest rate of 0.750%. The proceeds from the sale will be used to buy Bitcoin.

“MicroStrategy intends to invest the net proceeds from the sale of the notes in bitcoin in accordance with its Treasury Reserve Policy pending identification of working capital needs and other general corporate purposes,” noted the company on Friday.

As we reported, the offering was initially set at $400 million only to be increased to $550 million with an additional $100 million up for grabs despite the company getting a bearish call from Citi analyst for its big BTC bet.

Interestingly, the popular hedge fund known for its exceptional returns, Renaissance Technologies has also been buying the majority of the MicroStrategy stock this year.

As we reported, RenTech’s flagship Medallion fund also disclosed its intention to invest in CME Bitcoin futures in March, this year.

Just a month before MicroStrategy first indicated its interest in buying Bitcoin publicly in July, RenTech bought the stocks of MSTR in June and then in Sept., and it is now indirectly invested in Bitcoin.

“BTC is our best Hope”

MicroStrategy’s latest $650 billion round of Bitcoin bet would take their Bitcoin ownership to over $1.1 billion. It was in August when the publicly-traded software company announced that it had bought 21,454 BTC for $250 million then the next month another 16,796 BTC were bought for $175 million. Then earlier this month, MicroStrategy bought 2,574 BTC more for $50 million.

MicroStrategy CEO Michael Saylor’s view on the largest cryptocurrency is pretty simple — “BTC is our best Hope.”

“Every investor is in danger of losing their wealth due to the great monetary inflation. We all need a Store of Value that is not based on fiat.

Bitcoin is The Solution – an investment grade, safe haven, treasury reserve asset.”

Given that MicroStrategy is a software company, some raised questions on its Bitcoin investment, calling it a fund.

“MicroStrategy is not an investment company (IC) per the 1940 Investment Co. Act. An IC is a co. that invests ≥ 40% of assets (less cash & govt securities) in “securities”. Per the SEC, BTC isn’t a security. Ergo, holding BTC doesn’t cause MicroStrategy to become an IC,” clarified Saylor on Twitter late Friday or early Saturday.

He further went on to say that MicroStrategy is also not an ETF/ETP because they exist to invest in stocks, bonds, or commodities and are investment companies per the’40 Act.

MicroStrategy much like Apple & Microsoft is an operating company traded on a stock exchange which “just happen to hold BTC in our treasury reserves,” Saylor said.

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Author: AnTy

Citi Cuts MicroStrategy’s MSTR Due to CEO’s ‘Disproportionate Focus on Bitcoin’

Calling the recent rally “overextended,” Citi has downgraded MicroStrategy from neutral to sell in its latest report.

MSTR shares are up 168% over the past six months, climbing to a level not seen since 2000. These gains were made on the back of MicroStrategy’s Bitcoin bet. In August, the company first adopted Bitcoin as its primary reserve asset, and last Friday spent another $50 million on 2,574 BTC. During the time, the largest digital asset has rallied a whopping 150% YTD.

MicroStrategy’s commitment to Bitcoin turned the company and its CEO into a fully blown celebrity in cryptocurrency market participants’ eyes. This also got Citron research short on the company to say MicroStrategy is the best way to own Bitcoin in the stock market.

It also had many wondering if MicroStrategy is a software company or a Bitcoin hedge fund. This raises concerns for the company as it will raise questions from regulators who refuse to approve a Bitcoin ETF.

And now, MicroStrategy’s Bitcoin bet that has Citi getting bearish on the company, resulting in the company’s shares losing over 17% of its value in a single day.

Citi’s remarks came after MicroStrategy announced on Monday that it will be issuing $400 million convertible senior notes, proceeds of which will yet again be used to be even more BTC.

The price of Bitcoin also experienced a correction, which extended today. However, currently down around $18,000, a pullback has been expected after the recent rally from $10,000 to $20,000.

Analyst Tyler Radke sees “incremental risks to the story” following the debt issuance to buy more Bitcoin, which has been described as “aggressive” and possibly a “deal-breaker for software investors.” The analyst said,

“MSTR’s bitcoin investment has returned $250M (or worth $26/share or +20% towards stock) since August ’20. While impressive, it pales in comparison to the 172% return in the stock. At the current stock price, our analysis suggests that the market is pricing in much more optimistic valuation scenarios for the core business and Bitcoin.”

Radke further noted that the recent insider selling in MicroStrategy has been “significant and broad-based,” adding its shares may be overvalued.

The analyst also questioned Saylor’s “disproportionate focus on bitcoin.” Radke said,

“We are also concerned that the company could be losing focus on execution with CEO Saylor’s disproportionate focus on Bitcoin vs. running the business and signs of deteriorating employee sentiment.”

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Author: AnTy

Michael Saylor’s MicroStrategy Buys Another $50 Million (2,574) in Bitcoin

  • Founder Michael Saylor discloses MicroStrategy purchased another $50 million in Bitcoin
  • The tech company now owns over 40,824 BTC

MicroStrategy is known as a platform for business analytics, guiding other enterprises in their efforts to transform their own brands. The brand originally launched in 1989 with founder Michael Saylor, signing McDonald’s as their first major client in the early 1990s. In recent years, the company launched MicroStrategy 2020 as a way to use machine learning technology and augmented intelligence for business strategies.

Now, Saylor has announced another change – another massive investment, adding to the companies Bitcoin holdings. In a tweet on Friday, Saylor explained that the company purchased $50 million in Bitcoin, which amounts to 2,574 bitcoins. At the time of the purchase, the average cost per Bitcoin was $19,427.

This purchase is not the first time that the company has added Bitcoin to the company’s financial assets. In August this year, the company turned to Bitcoin as it experienced fewer returns during the coronavirus pandemic that was detrimental to the economy. At the time, MicroStrategy purchased 21,454 BTC for $250 million in Bitcoin, the average price was much lower at about $11,635. A little over a month later, they purchased another 16,796 BTC for $175 million. With today’s purchase of 2,574 BTC, the company owns just over $766M with bitcoin current hovering at $18,770.

Not only is the company extremely bullish on the top cryptocurrency, but Saylor has become a beacon in recent months, spreading the word of bitcoin to his peers. He even disclosed that he owns 17,732 BTC personally, worth over $332M.

Saylor’s faith in Bitcoin was recently discussed with Marc Friedrich. The CEO doesn’t believe that Bitcoin is in early the same position as it was even five years ago, making arguments against it irrelevant. With the massive growth since 2017, Saylor compares the asset to the career of Lebron James.

“…Lebron James played basketball from age 9 to 18, and he was talented but erratic and volatile. But then he grew up and from age 18 to 28, he destroyed everybody and everything in his way,” Saylor remarked.

Large transactions of Bitcoin – i.e. anything above $100,000 in value – have increased significantly amongst institutional investors in the last few months. Analysts say that there have been many factors to influence the investment, but Saylor and other investors believe that Bitcoin will remain to be a store of value in the market.

To view the disclosure that Saylor revealed in the tweet, here.

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Author: Krystle M

Immature Bitcoin Market Data Is ‘Garbage’ But It’s Sign of ‘Being Early’ – MicroStrategy CEO

Since first announcing bitcoin purchase in August and again in September, MicroStrategy CEO Michael Saylor had become a very vocal bitcoin supporter, a big change from seven years back when he thought its days were numbered.

Now, it is the ultimate hedge, according to him.

He constantly tweets about Bitcoin and how “it is an ark of encrypted energy to escape the currency flood.”

Recently, he talked about “The Long-Term Bull Case” for Bitcoin in an interview with Keith McCullough to convince Hedgeye CEO to “change his opinion of Bitcoin and join the cyber hornets.”

McCullough actually sold all his BTC earlier this month, just a couple of weeks before Bitcoin rallied 23% following Square’s $50 million investment, UK’s public listed Mode converting 10% of its cash reserves into BTC, and PayPal announcing buy, sell, hold, and shopping support for it.

“Bitcoin is an asset, not a commodity. Commodities are abundant and should be traded. Assets are scarce and should be owned. Pure monetary energy is the ideal treasury reserve asset, and for the first time in history, we can now own some,” is Saylor’s message to McCullough.

The “Garbage” Market Data

On Tuesday, he argued his Bitcoin investment by comparing it with Google and Apple investments.

“The thing with technology, Figure out the thing that is gonna eat the world, if you are right, own it, hold it and wait,” said Saylor.

In the current environment, bitcoin is the choice when the monetary expansion is expected to double, he said. Adding that the Federal Reserve has crowded everybody out of Treasury and debt with yield being effectively zero, which has been “stampeding investors into a store of value.”

As a matter of fact, Apple has been more volatile than bitcoin in the past three months, said Saylor. This has been because while monetary stimulus has been debasing fiat currencies, it has been pushing the stock market to new highs.

He particularly talked about the market data during the interview, which he argued is just “garbage.” The trading volume figures of the bitcoin market, according to him, are widely inflated as he challenged Bitcoin’s $25 billion volume to Apple stocks’ $24.76 billion.

“I know for a fact you can’t buy more than $35 million a day without people knowing, so there’s no freaking way there’s $24 billion trading,” Saylor said.

It isn’t even surprising, but a known fact as a 2019 report to the US SEC concluded that 95% of reported volume on crypto exchanges is actually fake.

According to Saylor, false market data is holding the leading digital currency back as it could erode trust in Bitcoin as an asset.

But on a positive note, Saylor said he “love[s] the fact that the data is a little immature” as it represents “the pain and the work of being first or being early.” But of course, the market “needs” high-quality data.

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Author: AnTy

First UK Public Listed Company, Mode Global Holdings, Converts 10% of Cash Reserves into Bitcoin

What started with public listed company MicroStrategy has now become a movement as more and more companies continue to join the ranks.

This month, after Square, now comes the London stock exchange-listed company Mode Global Holdings that is making an investment into Bitcoin.

In its press release, Mode announces it to be “the first publicly listed company in the UK” to make a “significant purchase of Bitcoin as part of its treasury investment strategy.”

The company allocates 10% of its cash reserves into Bitcoin and adopts the leading digital asset as a “treasury reserve asset” as part of its long-term goal to protect its investors’ assets from currency debasement.

However, the company didn’t disclose how much Bitcoin it is exactly planning to buy. While as per the company’s cash balance, by the end of June, the allocation only amounts to less than 7 BTC, the company raised £7.5 million on IPO (pre expenses), which puts it at about 75 BTC.

“As Mode Global Holdings is a PLC, the allocation should be transparent on the balance sheet, so it’s odd that specific amount is withheld at this stage,” noted Jason Deane, an analyst at Quantum Economics.

Bitcoin is the Way to Diversify

With the UK’s interest rates falling to a record low of 0.1%, the company was looking to diversify, which brought them to Bitcoin.

According to Mode, it always recognized Bitcoins’ potential as a reliable store of value and an attractive investment because of its safe-haven status and asymmetric risk/reward attributes. Jonathan Rowland, Executive Chairman at Mode said,

“This decision to allocate part of our cash reserves to Bitcoin is a further step in our mission to build a truly digital financial services business, combining the best of digital assets, payments, loyalty, and investment.”

Rowland sees Bitcoin as a vehicle for “financial empowerment,” in which his confidence only increased after facing the challenges of COVID-19. He said,

“Today’s allocation is executed through a modern, forward-looking but prudent treasury management strategy.”

The company further shared that their mission is to bring transparency and credibility to the digital asset space. It has also built a mobile app to buy, sell, and hold Bitcoin.

Also Read: BTC Price & PYPL Stocks Rejoice as PayPal Announces Support for Bitcoin, Ether, BCH & LTC

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Author: AnTy

MicroStrategy CEO: Bitcoin is the “Ultimate Inflation Hedge,” 1000x Better than Gold

Publicly traded MicroStrategy has taken a deep dive into Bitcoin, having bought a total of 38,250 BTC at a rate of $425 million and making the leading digital asset a part of their reserve, replacing cash.

This is a big conversion from MicroStrategy CEO Michael Saylor’s tweet about “bitcoin days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling,” in 2013.

However, in a conversation with Anthony Pompliano on his podcast, Saylor shared that he is “ashamed” for tweeting what he did, which he didn’t even realize until the crypto community reminded him of when the company first announced buying $250 million worth of bitcoin. He said,

“I’m like oh my god, I literally forgot I ever said that…but I took it as kind of like, kind ribbing like I didn’t get all worked up about. I’m like you’re right, I was wrong, what an idiot I was.”

Because They’re Going to Crush Everything

During his conversation, Saylor further talked about how before agreeing on bitcoin is the right idea, “we all needed to collectively be of the opinion that we were going to be generating cash at infinitum,” for which they went on a journey through corporately over the past year.

The company had $500 million in cash, and they had to decide whether to buy-back stock, buy another company, or keep it for a rainy day.

Saylor credited his friend Eric Rice, who owns bitcoin investment fund and kept on advising him on bitcoin, which the CEO kept on dismissing until “one day we’re sitting around my pool in Miami and he starts explaining it and something clicks in my head that maybe this is a pretty good idea.”

So, here they had to decide between precious metal and bitcoin after dismissing commercial real estate and equities and “I want something that can go up by a factor of 10,” Saylor said.

He compared Bitcoin to Amazon and Apple when they first came out — a good investment that has a digital dominant network and dematerialized something fundamental. So, you invest in that thing when they have a hundred billion dollar market cap because,

“When they’re ten times bigger than the next biggest thing, and they’re a hundred billion dollars, they’re probably going to crush everything.”

This is the Real Deal

Saylor, however, isn’t interested in hundreds of other cryptos available in the crypto space. Because, while it’s “great” to have all that innovation which may or may not work, an outsider needs something in which one can put in their $500 million and,

“Everybody in the community is going to spend every iota of their energy to make sure no one f’s with that network.”

Not to mention, bitcoin is the dominant crypto, and nothing comes close to it. Also, community ethos is one of the key drivers of their belief in its success.

And although BTC is volatile, what other choice does anyone have in the current environment.

“Let’s be honest there’s a negative real yield on everything else,” whether it’s gold, bond, or cash.

“Every other non-volatile asset is a negative real yield, which means that everything else is lifeblood draining out of my veins,” said Saylor, adding he would choose the asset with volatility over “non-volatile cash that bought 30 percent less in a matter of eight weeks.”

Moreover, in the next ten years, with people coming into move hundreds of millions of dollars, they will tend to damp all the volatility because it’s in their interest.

“I think people were kind of oblivious to the need to slash the role of bitcoin and the bitcoin narrative of digital gold – this is the ultimate inflation hedge,” said Saylor, who sees the digital asset as a 1000x better than the yellow metal.

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Author: AnTy

Another Company Goes All-in In Bitcoin; ‘A Much Better Alternative To Saving Cash’

After billionaire investor Paul Tudor Jones and MicroStrategy, now a small company, a restaurant called Tahinis that specializes in middle eastern cuisine has jumped into Bitcoin.

The company took to its Twitter account to share that they have converted their “entire” cash reserves, originally used as savings, into Bitcoin.

The Ontario, Canada-based restaurant operates in four corporate locations with further plans to open three franchises.

The decision was made by the owners in the aftermath of the March coronavirus crisis during which they tried to keep the restaurants afloat amidst the expansion phase.

Here came the central bank assistance in the form of money printing that has not only the company owners but also the employees, some of them were also partners, making “a lot of money.” The tweet reads,

“Our Cash reserves swelled and business was booming again. But it was apparent to us that cash didn’t have the same appeal. That eventually with all the excess cash circulating the economy that cash would be worth less.”

Already aware of cryptocurrencies, one of the company owners went into the bitcoin rabbit hole while expanding his financial knowledge, although his investor idol Warren Buffett called it “rat poison squared.”

Given that in the current rallying markets is outperforming Buffett who has been selling his banking holdings to jump into gold now, it is best to not take the Oracle of Omaha’s word about bitcoin. Not just gold, but Buffett has been late to the party when it comes to the internet and Apple as well.

More Returns & a Lot More…

So, first, the Tahini restaurant owner started accumulating in his personal account and from there “we as a company decided to store all of our excess cash reserves into bitcoin as it offers a much better alternative to saving cash.”

They are planning to “continue to do that over the coming years and maybe forever if we don’t have a need for the fiat.”

Given the fact that in 2020 so far, Bitcoin outperforms S&P 500, gold, Treasuries, and oil, it makes sense to move into Bitcoin. However, industry experts caution on going all-in in Bitcoin, rather advise investing a certain percentage as the crypto market is extremely volatile.

Besides being an attractive investment asset and becoming a store of value, embracing bitcoin also helps the companies in attracting interest. MicroStrategy stock has jumped 20% following the announcement.

Moreover, owning cash on the balance sheet is “quite onerous,” as it requires keeping multiple global checking accounts that involve time, expensive fees, and delayed settlement, said Jeff Dorman, chief investment officer at Arca.

Meanwhile, owning Bitcoin means reducing reliance on third parties, lower transaction costs, potentially increasing yield, and increasing payment flexibility — “a nice byproduct of a corporate finance department entering the digital world.”

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Author: AnTy

Billion Dollar Publicly-traded MicroStrategy Buys 21,454 Bitcoin as a Reserve Asset

MicroStrategy is now taking a deep dive into the world of bitcoin.

The $1.2 billion Nasdaq listed software company has officially announced its position in the largest digital asset. A fortnight after announcing to invest in bitcoin as an inflation hedge, the company has purchased 21,454 BTC at an aggregate price of $250 million, inclusive of fees and expenses.

As we reported, in its earnings call on July 28, 2020, the company shared its bitcoin investment plans as part of its two-pronged capital allocation strategy to “maximize long-term value for our shareholders,” said Michael J. Saylor, CEO, MicroStrategy Incorporated.

According to Saylor, it is their investment belief that bitcoin is a “dependable store of value and an attractive investment asset,” that has more long-term price appreciation potential than holding cash. He said,

“Since its inception over a decade ago, Bitcoin has emerged as a significant addition to the global financial system, with characteristics that are useful to both individuals and institutions.”

The company recognizes the digital asset as “a legitimate investment asset that can be superior to cash” as such giving it a principal holding in its treasury reserve program.

It has been after months of deliberation that the company decided to allocate its capital into bitcoin, revealed the company. The decision was in part driven by macro factors that are creating long-term risks for their investments.

Economic and public health crisis, unprecedented government financial stimulus measures including QE around the world, and global political and economic uncertainty are the factors listed by the company that have a “significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types.”

And bitcoin provides “not only a “reasonable hedge against inflation but also the prospect of earning a higher return than other investments,” said Saylor.

According to the company, the world’s leading digital asset is a digital gold that is stronger, smarter, harder, and faster than “any money that has preceded it.” The CEO said,

“We find the global acceptance, brand recognition, ecosystem vitality, network dominance, architectural resilience, technical utility, and community ethos of Bitcoin to be persuasive evidence of its superiority as an asset class for those seeking a long-term store of value.”

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Author: AnTy