So, MicroStrategy has bought 38250 BTC up to date. I don’t know of any other big company that has disclosed owning Bitcoin in general, let alone mentioning the exact amount. I would assume MicroStrategy to be the top Bitcoin owner in the world among companies right now.
This gives it an interesting quality as a stock in traditional portfolios. You will get Bitcoin exposure (a lot) by owning this company. By the sound of Michael Saylor (the CEO), I get a feeling they might not be done with this amount of Bitcoin. MicroStrategy is a cashflow positive business and most likely fiat will be sold for Bitcoin also in the future.
It’s logical and obvious that a Bitcoin bull market will also catapult companies that hold a lot of BTC. I have no calculation basis for the following but my feeling is that if/when BTC goes 10x to $100k, MicroStrategy’s valuation will also go 10x. Most likely even more because a stock is easier to buy and more convenient to hold for some old school investors, similar case for the premium in Grayscale’s Bitcoin trust (GBTC). MicroStrategy also has the cashflow aspect on its side, and Bitcoin appreciating would prove their decision to be right and boost their reputation – likely to make smart moves also in the future.
In my mind, buying MicroStrategy is very similar to buying Bitcoin. If I was thinking of buying GBTC right now, I would have to think if I should buy MicroStrategy instead. I think it makes a great competition for GBTC which has been on its own as a Bitcoin exposure for traditional portfolios. I’m gonna start tracking these both just for fun, starting from today with the following prices: MSTR – $164.95, GBTC – $11.93.
I’m cheering for MSTR because how can you not love this company! Also, everybody hates GBTC already anyway =D
Of course, if/when more and more companies start adding Bitcoin to their balance sheets, MSTR will not be unique in this regard anymore. So I’m not sure for how long my comparison will be relevant or interesting. Let’s say Apple discloses something similar. Would people buy MSTR as a proxy Bitcoin anymore? I don’t know, maybe they would, depending on the valuation.
It’s also interesting that the higher Bitcoin price goes, the more this amount of almost 40k Bitcoin will get out of reach for other companies. 2017 retail FOMO will pale in comparison. MSTR might become one of the biggest companies of the future.
I got no stocks as I’m a 100% Bitcoin kinda guy, but for my dad, older relatives, some no coiner friends – I think I might shill them this one stock pick.
-BMM
BMM, trying to understand the seeming lack of correlation between BTC, GBTC, and MSTR. No rhyme or reason. Also can’t find a reason to to pay GBTC premium now, since MSTR and pending ETF’s by large houses no longer justify the GBTC tax for ease of trade. Thoughts?
Hi John, I haven’t checked BTC and GBTC correlation in a short time frame but in general GBTC has the premium as you say, and the amount of premium varies – I would guess depending on how Grayscale or some other entity can benefit from the premium. So premium goes up a lot and then comes down again. MSTR and GBTC I’ve been tracking, although kinda slobbishly – updating once a week or so on average. So eventhough there’s probably not a great correlation on a daily basis, the long term chart is pretty similar as you can see from my monthly posts with the chart. Though MSTR seems to be lagging GBTC and if you would buy MSTR purely for their BTC holdings it would be even more overpriced than GBTC. In general it seems that MSTR has a life of its own, many times not participating to the BTC rallies but then catching on later when GBTC is flat. Its an interesting pair to compare and longterm I have no idea which one will be the better bet. Better to just buy the real thing, Bitcoin!
I am weighing gbtc and mstr. I can own mstr without having a 2% expense ratio and premium, and mstr caryies some diversification as you have the assets of mstr so it is not a pure crypto play and those cash flow for the business as well. If the CEO and board are this nimble and open to crypto I think there will be exciting moves by most over the next decade. I need to understand most base business though :X
I personally hold none and I’m doing the comparison just to generate an (hopefully) interesting chart. Nice to see after few years how they match up. MSTR will be a solid stock to own if you are into stocks, if you are pondering between the two, maybe split it 50/50 or something. But the best is always to have the real thing, which of course is Bitcoin itself!
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