@johnarb @semperfrosty @NoahA and the rest of the clown show....you guys are such pussies! This is just a pullback...the horsepower hasn't even kicked in yet! Yes I think 45k before 450k but I still think 183k before either! I wouldn't even flinch until this breaks at least the .382 level...last time that was the spring board to face rip part II.
I think I have this right...so this shows the effect of leveraging starting with 1 btc bought @ 46k, using a loan rate of .80 to continuously re-buy. The liquidation level I got off google was total borrowed/.83 You can see you greatly increase your break even and liquidation threshold.
So what number are we looking at Can't believe you found this. This is what we needed Much appreciated Now we can start to have an idea what's going to happen at each threshhold and where mstr stands as bitcoin sells off
Well I didn't find it...I put it on a spreadsheet as an example. You can go to bitcoin lending sites and use their calculator. The site I found for this example actually uses 50% loan to equity...however if MSTR is leveraging they obviously aren't going to use one of these sites lol. If you have the purchase price and amount MSTR is leveraging then you can extrapolate using that data...to get a rough idea. The article says that they just snapped up 29646 bitcoin between Oct31-Nov10 when price started pumping. However their overall break even is 46k because they have been buying for 4 years... _________________________________________________________________________________________________________ https://www.bnnbloomberg.ca/busines...ys-203-billion-of-bitcoin-in-latest-purchase/ " (Bloomberg) -- MicroStrategy Inc. bought about 27,200 Bitcoin for around $2.03 billion, the largest purchase by the crypto hedge-fund proxy since just after it began acquiring the digital-asset more than four years ago. The enterprise software maker, whose corporate strategy now includes buying the cryptocurrency, bought the tokens between Oct. 31 and Nov. 10, according to a statement on Monday. It’s the largest amount of tokens purchased since the firm announced in December 2020 that it snapped up 29,646 Bitcoin. " "As of Nov. 10, the Tysons Corner, Virginia-based company, together with its subsidiaries, held about 279,420 Bitcoin, valued at an aggregate purchase price of approximately $11.9 billion and an average purchase price of around $42,692 per Bitcoin" _________________________________________________________________________________________________________ So if I plug in these number to my spread sheet, and project a buying pattern based on the past we get: Honestly this seems like a bad strategy when their entries are about as good as @johnarb ...raising the break even and increasing risk against a significant downturn. This strategy can work with the right timing, but not suited for a dollar cost averaging scenario on leverage imo..
Yesterday's rise in BTC & related stocks did surprise me. BTC is momentum driven & is sensitive to change in perceived market liquidity, but I think the market dropping yesterday was just a profit taking day & not a change in liquidity. My strategy is still long BITX MSTU CONL ETHU BITO calls and 15% out of the money COIN weekly puts. Actually Thursday I was up like 300% on the weekly COIN puts at one point.
What should the leverage to market value of BTC be relative to MSTR market cap? I'm not sure but I bought MSTR before the BTC spot ETFs came out and it was trading at 1:1 to BTC at the time. Then it went to 2:1 after IBIT, etc. came out. Sine the September 2024 low it has gone from 2:1 to as high 5:1 on certain days. Now it seems to be back to 2:1. The real question is what is Bitcoin? Is it a cash equivalent on the balance sheet? If it is, it should be marked to market every day. That has been the FASB view since I was a BA minor in college when I took Auditing & Cost Accounting (1987). However since the dollar is meant to be stable & not volatile that rule didn't really have any meaning since the dollar was set at 1 all the time. In reality MSTR is more like the Business Development Companies (BDC aka closed end fund) that owns diversified assets like junk bonds, CLOs, bank loans, mezzanine loans, private equity shares, etc. I own some of these BDC CEFs and occasionally they float convertibles to get more capital to invest just MSTR does. Its behavior is more like these BDC CEFs & its NAV goes up & down with the spot price of Bitcoin since they only invest in one asset & not a diversied bunch like the traditional BDCs. Its price vs. NAV goes up & down based on the momentum of the investment. So yeah I understand the "overvaluation" of Bitcoins owned vs. the MSTR spot price.