The first 21,000 are the hardest
When MicroStrategy® Incorporated (Nasdaq: MSTR), led by Chairman and CEO Michael Saylor released their Q2 2020 financial results on July 28, 2020, they announced their capital allocation strategy:
"With more than $500 million in cash and cash equivalents... MicroStrategy will seek to invest up to (another) $250 million... which may include stocks, bonds, commodities such as gold, digital assets such as #Bitcoin, or other asset types."
Soon after, on August 11, 2020, #MicroStrategy announced their first purchase of BTC (0.1% of Bitcoin's entire supply) as a primary treasure reserve asset:
"MicroStrategy, the largest independent publicly-traded business intelligence company, today announced that it has purchased 21,454 bitcoins at an aggregate purchase price of $250 million"
As of December 9th 2021, excluding Michael Saylor's personal ₿TC holdings, MicroStrategy now HODLs* 122,478 coins (±0.6% of Bitcoin's entire fixed supply), a value of approximately 6 billion USD.
Furthermore, MicroStrategy has a market capitalization of 6.5 billion USD and a debt amount of more than 2 billion USD meaning they have purchased Bitcoin using leverage and issuing outstanding shares, a #bold move. Their "Long-Term debt to Total Capitalization" is fairly high at ±82% while there "Float %" is similar to that of #Tesla at ±80%.
Note - Float % indicates the amount of shares that are available to be bought and sold by the general investing public.
Evangelization
Since this time, Michael Saylor has gone on to become a major #Bitcoin Evangelist. His tweet from below from March 13, 2021 displays his overall thesis on ₿TC as "the world's best store of value & most disruptive digital technology."
As an #MIT graduate (dual major: i) aeronautics and astronautics; ii) science, technology, and society), Saylor has preached his conviction for Bitcoin through numerous tweets and media interviews. Not only is his conviction (and near obsession) for this digital asset fascinating, his method of explaining and synthesizing Bitcoin with #technology and #engineering resounds on many levels with investors and onlookers alike.
Throughout all of history, such passion for an item, digital or physical, has rarely been witnessed.
Investing through the decades 🕰
“You can't increase the supply of Bitcoin...the price will go up forever” - Michael Saylor
Saylor preaches that Bitcoin is digital real estate which never needs to be sold and declares with conviction that "it will go up forever" 🚀
He compares Bitcoin to physical property and states its advantages: "if you're looking for scarce property that's #fungible, #digital, low maintenance, #transferable, that can be developed, Bitcoin is that best property in the history of humanity...you should put your discretionary wealth into digital property that you can keep for the rest of your life and if you're smart you can live off the yield from it or the reverse mortgage against it."
The Melting Ice Cube of Purchasing Power 🧊
"We just had the awful realization that we were sitting on top of a $500 million ice cube that’s melting" - Michael Saylor
Inflation has become a major theme and discussion topic in 2021, it is often described as a hidden tax on a cash account denominated in government controlled (fiat) #currency. It was reported that the consumer price index increased 6.2% from October 2020 to October 2021, the highest surge since December 1990. It can be argued that any employee who has not received at least a 6.2% increase in pay is getting paid less than they were a year ago to execute the same work.
The fear of #hyperinflation has also been looming in some groups while others have simply tried to wave it off, claiming for months that inflation was simply "transitory."
Propagated for numerous months during the middle of 2021, the theme of "transitory" #inflation was led by Jerome Powell, the Chair of the US Federal Reserve. However, in late November 21', Mr. Powell changed his tune and suggested that the term "transitory"should probably be retired:
"it's probably a good time to retire that word and try to explain more clearly what we mean" - Jerome Powell at the Senate Banking Committee
For Bitcoin evangelists, the devaluation of fiat currency through excessive Quantitative Easing (QE, a fancy word for "money printing" ) by the central banks has been their main issue with the current, centralized, government controlled monetary system.
QE: central banks increase the money supply by purchasing government bonds and longer-term securities which effectively encourages lending and investments with lower interest rates.
The US, M2 money supply has increased by more than 33% since Q1, 2020. In this same period, the value of Bitcoin has increased 📈 by over 400%. The increase in money supply reduces the purchasing power of the dollar for everyday citizens, penalizing those who have worked hard and saved their money, especially citizens who haven't been capable of investing in appreciating assets.
Similarly, the US national debt has increased by more than 5% in the last 12 months alone. At the present moment in December 21', the US government continues it's quest to increase the debt which also has the richest man in the world (a fellow Bitcoin HODLer) asking very public questions:
Bitcoin is Hope
“Volatility is the price you pay for it to be 10x outperforming the S&P index over a decade” - Michael Saylor
Hope.com is the domain name owned by Michael Saylor, purchased a lifetime ago. This website is now used for Bitcoin evangelization. Time will tell how MicroStrategy's #hope in Bitcoin will play out. If their Hope is founded, then Michael Saylor and his laser-eye focus will be remembered as one of the greatest thinkers and investors of all-time.
Composed by Emanuele Marabella, Building Engineer and $MSTR shareholder,
Published on December 9, 2021
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