The Microstrategy news just gave Bitcoin even more staying power than it had before...

in LeoFinancelast month

What Microstrategy is doing is likely going to accelerate bitcoin and crypto adoption by orders of magnitude and makes it that much harder to ban

A few years from now when bitcoin is trading for north of $100k, you can look back and thank Microstrategy.

When bitcoin is an option for your IRA and other retirement accounts, you can thank Microstrategy.

When your employer offers you the ability to take part of your income in bitcoin, you can thank Microstrategy.

When you can buy your cup of coffee using bitcoin, you can thank Microstrategy.

Ok ok, that last one was probably a little extreme and not likely to have much to do with Microstrategy, but you get the point.

Microstrategy has literally changed the game and greatly sped up the adoption cycle of bitcoin and crypto.

Why this matters...

If you have been following along with any of my recent posts, you likely have come to the conclusion that I think the news of Microstrategy investing $425 million into bitcoin is likely some of the biggest news of the year.

In case you haven't been following a long, here's some reading material for you:

https://hive.blog/hive-167922/@jrcornel/possible-watershed-moment-for-bitcoin-as-microstrategy-swaps-fiat-for-bitcoin-as-company-s-reserve-asset

https://hive.blog/hive-167922/@jrcornel/the-biggest-news-for-btc-this-year-is-something-that-no-one-s-really-talking-about

https://hive.blog/hive-167922/@jrcornel/bitcoin-tends-to-turn-even-the-staunchest-of-doubters-into-believers

https://hive.blog/hive-167922/@jrcornel/microstrategy-has-already-made-more-in-stock-price-appreciation-than-they-risked-buying-bitcoin

https://hive.blog/hive-167922/@jrcornel/so-how-did-microstrategy-get-usd425-million-into-btc-without-moving-the-price

Yes, that is a lot of reading material and I promise this will likely be my last post on the subject, well until Microstrategy buys more bitcoin. :)

But anyways, like I mentioned in the first post above, this is likely to be a watershed moment for bitcoin and crypto.

Here we have a $1.7 billion dollar company putting $425 million into bitcoin, and at the time the company was worth closer to $1 billion or so.

Given that kind of stock price appreciation, what are the odds that Google, Microsoft, Apple, Facebook, etc etc etc all don't start demanding that they put at least some of their cash into bitcoin?

Especially given the fact that these companies are sitting on hundreds of billions in cash.

In fact, those questions are already being asked:

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Once it becomes apparent that the easist way to juice your stock price is just pick up some bitcoin, all these big tech companies are going to be doing it.

And don't forget about Twitter and Square, who are also sitting on billions in cash, it's likely a guarantee that they eventually move it to bitcoin given Dorsey's fondness for the cryptocurrency.

I suspect that within the next 12 months we are likely to see an arms race of sorts as tech company after tech company starts picking up BTC not to be left behind.

Another big development from this...

As I mentioned above, roughly a third of Microstrategy's valuation is tied to their bitcoin holdings.

And it's market cap is likely to ebb and flow with the price of bitcoin from here on in, which in effect makes it like a bitcoin holding company.

Which is very interesting in a day and age where there are no legally approved bitcoin ETFs in the United States.

MSTR pretty much just become one.

But that is the just the side point to my real point...

The biggest risk to bitcoin is an existential risk, from major governments around the world, at least in my opinion and many others...

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If they coordinated together and decided to ban bitcoin all at once it could be a very big deal for the price of bitcoin and it's future. It can't technically be killed, but it could be pushed so far underground that for all practical purposes, it has been killed.

However, how many corporations have to put it on their balance sheet before the possibility of Congress banning it drops to zero?

1% of corporations? 5% of corporations? 10% of corporations?

Whatever the number is, the more large tech companies that start to hold bitcoin as a reserve asset, the lower the odds of it ever being banned.

So, not only is this big news for the price of bitcoin and its likely future HODLers, but this is also huge news in that bitcoin also just got a lot less likely to be banned.

It's the biggest news of the year folks and I'm looking forward to seeing the next major company follow to in their footsteps!

Stay informed my friends.

-Doc

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Very great news... I didn't understand the details well, but I understood their importance.

Yep, big development. Hopefully the SEC doesn't pour cold water over everything.

Wouldn’t this cause not only the bitcoin price to moon but also the stock market in general? It would also flop any list of top companies on its head. Basically it could make a medium size company a massive powerhouse if they put enough into bitcoin and it’d make microstrategy the biggest company in the world. this is difficult to imagine happening overnight. I think it’ll happen in slow motion in steps, half this bull run and half during the next cycle. It’s all up to jack dorsey and when he decides it’s time lol

Yep, that is exactly what is happening to Microstrategy. They were a $1 billion dollar company prior to the investments. Now they are inching up towards a $2 billion dollar company. If bitcoin does something crazy and goes to $200k, they are going to leapfrog a ton of companies...

I am sure the SEC is going to start asking some questions here soon...

Eh Bitcoin can't be banned just like the internet cant be banned. You can't ban the future. I would honestly interpret an attempted ban as a strategy to shake out weak hands and buy low.

Sure it can't technically be banned. But if several of the world's largest countries got together and said bitcoin is out, anyone caught holding or transacting in bitcoin will face a minimum of 10 years in jail. I think we would see the price about 90% lower than it is today, if not 95% lower.

That is assuming that no one successfully challenges and rebukes said "sentence", or the premise it tithers on. After all, it could have a Streisand Effect and completely backfire, like the Miranda Rights.

This has indeed been a very bullish bit of news @jrcornel. Nice coverage of it and interesting questions raised about whether there is any prospect of some of these global titans choosing to diversify their assets into BTC.

I personally suspect much is going on "behind the curtain" in making a final determination of how (not if ...) BTC will be regulated. Only when these titans know the "rules" (if they don't actually play a major role in writing them ...) would I anticipate them becoming major buyers.

We'll see soon enough!

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@roleerob

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Yep, I agree. Though I think the news earlier this year that the comptroller of the currency said federally chartered banks could hold bitcoin helped provide a lot of clarity for the big boys...

If that happens you will have to look behind you to see the moon.

Perhaps they will or most likely have been acquiring bitcoin. There are all of the good reasons that Michael discussed in the podcast with Pomp, but I don't see that as the top risk for the mega companies you note. I could see them starting to take payments in bitcoin and holding that while spending their cash reserves. This would let them acquire bitcoin with minimal board and compliance changes. All of them deal and hedge in multiple currencies.

Cheers

Yes that is a good point. Though with not many people using it currently as a form of payment, I am not sure there would be a rush from their customers to start using it... I still think we going to see a lot of companies picking up some BTC as a reserve asset. Will they put 100% of their cash into BTC? Probably not. However, will they put something in the realm of 1%-10%? I could see a whole lot of em going down that path... And with literally trillions sitting on corporate balance sheets, if bitcoin takes 1-10% from that, it will put the price in an entirely different price range.

There will be a few more companies put their foot in the bitcoin pool and Michael laid out the road map very well. I see these things going in cycles the new now is Microstrategy and there will be more, this will dry up liquidity and push the price up. These companies are doing this as risk on for the dollar, but I think the next cycle is a group that is in desperate need to raise capital, retirement funds. There has been a lot of buzz in the crypto circles about this and when they see the yoy returns they too will put those 1-10 % foots in the pool. Then there is no turning back because at that time retail will move in as the price will dominate the news.

The questions is what pushes bitcoin above 1m? I'm thinking governments and that is when the fun begins.

I am already in a paradigm where bitcoin is 500k ;) Now if I could have the same faith in hive.

Cheers

It could happen. I think if bitcoin breaks $200k I think it's a given it eventually goes over a million. Just gotta get it up there.

Regarding HIVE... I am not sure the best way to make it more valuable, but we have seen for 4 plus years now that the currently model doesn't really work...