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Quite The Ballsy Move, No?
As I waited for my midday dose of gabapentin, a dab of Australian Dream topical cream, and a pot brownie to coalesce and hose down the latest spontaneous fiery combustion in my feet, something kept popping into my head over and over: the incredulous move into Bitcoin that Microstrategy Inc. CEO Michael Saylor recently made. I decided to conjure up this post to further take my mind off of my feet. It sucks to involuntarily spend a lot of time thinking of my feet. 🙂
Most people in the Bitcoin community were pleasantly blindsided when Mr. Saylor announced the company’s investment of $425M of its cash reserves in Bitcoin. Quite the ballsy move, no?
Mr. Saylor hasn’t always been a long time Bitcoin bull. In fact, he said in 2013 that Bitcoin’s days were numbered. However, when he kept seeing treasury yields sinking with no end in sight and inflation hiding right around the corner, he realized he was sitting on a pile of cash that was losing its purchasing power.
Prior to the Microstrategy announcement, the Bitcoin community thinking was that the next tier of incoming Bitcoin investors would be comprised of big money investment institutions like Vanguard, Fidelity, Pension funds, hedge funds, etc. No one thought that cash rich companies would start using Bitcoin as a better store of value and hedge against inflation than the old warhorse, gold.
Since Microstrategy is directly invested in Bitcoin, all of the company’s shareholders are indirectly invested. They now have a stake in the little engine that could. Here’s a snippet describing the stake of one of those shareholders….
And here is a tidy little table showing the BTC exposure of two other major Microstrategy shareholders…
Even if you’re currently not a true believer in Bitcoin’s future role as a groundbreaking, new, global monetary asset, you would do well to contemplate investing something like 1% of your savings in Bitcoin. After 11 straight years of bulletproof, 24 X 7, operation (no banker’s hours in Bitcoinlandia!), Bitcoin (unlike all the johhny-come-lately shitcoins) has earned some real “street cred” in the minds of some of the world’s best investment advisers. The possibility of a 20X return before the next halving (approx. 4 years) takes place blows away every other investment opportunity on the planet.
I already own some Bitcoin outright, but I decided to show my appreciation for Mr. Saylor’s ballsy move by purchasing some stock in his company. I’ve got the receipts to prove it but I’ll never tell how many shares I bought. 🙂
The Third Thing
There are 3 things I’d like to accomplish before the emperor drags me off to the bespoke tailor shop to get fitted for my dirt suit.
Here are those 3 things:
- Ensure that my wife doesn’t have to worry about finances for the rest of her days.
- Tell a joke in the seconds preceding the exact moment at which the universal life force ceases to animate my mind and body.
- Help my readers get rich so that they’ll remember me long after I’m used as a body double on “Weekend At Bernie’s 2“.
After 40 years of diligently saving and investing (instead of recklessly borrowing and spending), I’m pretty confident that I’ve got thing number 1 covered. Regarding thing number 2, there’s not much I can do until D-Day arrives other than picking out an appropriate, short, one-liner joke and memorizing it. Got any suggestions for my death bed joke? 🙂 The fewer the words the better. Please post it in the comments section.
This post is an attempt to address thing number 3. As you might have guessed, the content has to do with the greatest financial innovation of all time, Bitcoin. Bitcoin is the first unforgeable, fixed-supply, digital commodity that the world has ever seen. Only 21 million Bitcoin will ever be mined from the magical unknown. Approximately 18M of those Bitcoin have already been unearthed to date and the last Bitcoin will be electronically hatched in the year 2140.
According to PlanB’s Stock-2-Flow (S2F) model, Bitcoin’s price will cross the $250K threshold sometime within the next 4 years and violently oscillate around it until the next halving event sometime in 2024. With the current price at approximately $10K, that’s a monstrous 25X return in 4 years.
Of course, S2F is only a model and it might be wrong. However, as you can see from the graph below, eleven years of real Bitcoin price data (colored points) fit the S2F model (discontinuous white line) pretty snugly.
The total market value of Bitcoin is currently close to $200B. However, to achieve a 25X return, the market capitalization needs to rise to $5T. WTF!!!!!!! For reference, the total market capitalization of gold is around $10T.
One of the most common questions people ask about the outrageously optimistic S2F model is
Where the hell is the additional $4.8T in market cap gonna come from?
The figure below shows the types of current and future Bitcoin investors along with their entry points on the parabolic road toward a $5T valuation.
At first, only hardcore computer geeks owned and transacted in Bitcoin in 2009. Next, more and more individual retail investors arrived on the scene and propelled the market cap to the $200B where we are now. The big money will come from “woke” institutional investors who discover how perfectly Bitcoin serves as a coveted store of value monetary asset. The humongous money will come from forward-thinking government treasuries that supplement their gold reserves with Bitcoin as another hedge against severe economic distress.
Evidence is trickling in showing that some big institutional investment firms and hedge funds are either prepping to buy, or are buying, Bitcoin. Here is a sample of these woke institutions:
So, there it is. It’s my latest attempt to accomplish goal number 3 by nudging readers to invest in bitcoin as the world’s next greatest store of value.
Why am I here?
WTF?
Meh!
D'oh!
My BTC Address
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