RT @collectionist: Will we see public companies put > $1b into btc before year’s end? I think so... Square Puts 1% of Total Assets in Bitcoin in Surprise $50M Investment - CoinDesk https://t.co/16IOfi9Rlw
Seems like an easy way to make a quick buck. Their purchase didn't raise the price. Their announcement did. So they could just put 1% in, make announcement, sell that 1% for a huge profit, then make a second announcement a quarter later declaring they sold in the last quarter dropping the price. Rinse and repeat.
Jack Dorsey is the biggest bull there is in Bitcoin. The Square and Twitter CEO has a one word bio on his Twitter profile ("Bitcoin"). That's it. So the biggest believer only put in $50M so I doubt other corporate CEO's will do much more than that and will probably do a lot less or nothing at all. MSTR buying $425M was a one-off fluke. Also, the price hardly moved on this purchase as it was done OTC which means there are a lot of Bitcoins up for sale and it will be very hard to move the price with this type of buying. Sorry for the cold water.
I honestly don't think Jack is anywhere near the biggest bull in bitcoin. I do appreciate that he's funding development and is well positioned to expand adoption drastically. And I'm happy he has good advisors who have steered him away from shitcoins.
From an institutional perspective, 1% isn't a small move. Amateur investors often don't realize just how much portfolio diversity is industry standard.
For a comparison, here is Lyn Alden's portfolio allocation from her latest newsletter.
Alphabet (GOOGL) has 10% of her growth stock allocation. Meaning 1% in total portfolio allocation.
Having 1% of your portfolio in Bitcoin is a solid move.
> For a comparison, here is Lyn Alden's portfolio allocation from her latest newsletter. https://i.imgur.com/quRB8NR.png
Wait, it has no bitcoin on it though, or is it just some example of a portfolio she's given?
She was on a bitcoin podcast tour recently, and I think she strongly advocates for a bitcoin allocation so it'd be strange if her portfolio didn't have any?
Seems like a good move. It could be a risk, but when you look at it on the scale of things, 1% isn’t a lot. I’m sure they would be able to unload it pretty quickly if they wanted too since CashApp sells Bitcoin.
Not yet. Square is directly involved in Bitcoin as per its business. So, it's not surprising that they put some money in Bitcoin.
The real "begins" moment is companies other than MicroStrategy (companies that are not related to the Bitcoin protocol development) putting some into Bitcoin.
Well, clearly there are just as many people doing the opposite and happily selling at these prices.
Do I think BTC will be worth much more than $11k some day? Yes. But that wouldn't stop me from selling a shit ton of my BTC if I had like 10,000 of them.
They’re buying over the counter and not pumping the market price up crazily. But nonetheless this will reduce supply. It typically takes a year or so after each halvening before supply really starts to be too low for demand, this might pull it forward a bit.
Nonetheless probably would be best if more than two companies did this lol
And all of this was done OTC so no real spot involved other than slow buying over a period of weeks, it was maybe 10% of daily volume over 10 days if that.
None of that would move the market, but the news of them buying did.
Yeah, right, market cap doesn't have anything to do with supply and demand. Market cap is only the number of multiplying the current supply per the price the people is willing to pay for a unit of that supply.
The entire concept of “market cap” is not applicable to bitcoin or any other cryptocurrency.
The total sum spent purchasing all bitcoin currently in circulation is not equal to the market cap. It’s only a small fraction of that. For instance, a sizable amount of coin in the early days were obtained for free or below a dollar.
The total sum to be received by everyone holding bitcoin in case bitcoin is sold off until it hits zero is also not equal to its market cap. It will be an amount much, much lower.
Also, market cap is easy to manipulate especially when liquidity is low.
In conclusion, market cap is pretty much a meaningless number for cryptocurrencies.
How long does it take to take Bitcoin out of cold storage? You can do it in a matter of hours if you want. Unless you are looking at the price change in really short time frames, cold storage doesn't matter. Bitcoin is probably the most liquid asset in the world.
The fact is most people are holding long term and don’t care about price swings. Few people are willing to pull their bitcoin out and sell when it goes up a thousand. Therefore market cap is misleading. Most people aren’t treating bitcoin like a fungible asset.
Even Michael Saylor said he was ready to sell his hundred of millions of dollars at any moment just in case. All your talk about spot demand and supply is meaningless in a time frame larger than a few weeks.
And you can put a house on the market fast too. That’s crazy you think Bitcoin is more liquid than USD or other national currencies.
Price is set by last sale. That’s why Bitcoin has such dizzying jumps and falls.
Are you seriously saying that real estate is as liquid as Bitcoin? Lol.
And you could easily turn millions of bitcoin into any national currency at any moment 24/7. I don't know what are you even talking about.
No I’m not saying that. I’m saying USD is more liquid than bitcoin. And transaction limits for bitcoin make it unsuitable for a national currency. Lightning is not yet even close to up to the task. But ok.
Who is even talking about Bitcoin as a national currency?
My whole point is that 50M is nothing relative to the current market size. Market cap is important because it gives you an idea of the size of the market. Obviously there are other important indicators as volume, etc. But disregarding market cap and implying I don't know what I'm talking about for using it as an indicator was arrogant and ignorant.
Yes,... it must be that the price is set, not only because of demand but also because of supply. It must be that many investors want to sell because the asset became more valuable and they want to secure their gains. Maybe people need to sell because they lost their jobs or other investments due to bitcoin-unrelated events unrolling on the globe nowadays.
If demand goes up, and price does not rise, it means supply goes up too.
Also, they will not trade naively enough to move the market. Michael Saylor is on the record saying he bought strategically over many weeks in small amounts so he didn’t pump the price. The positive effect on price comes later because they’re taking supply off the market (in microstrategy’s case for “100 years”)
That would still increase the price. It would increase it slowly but he can only buy slowly if bitcoin are available. Demand is aggregated over lots of players and it would have increase during his buying spree. The difference would be a pump versus a more natural increase. We saw neither. That’s what I’m confused about. Saylor made a massive buy, has been talking non-stop about it since, and the price is still down (slightly). What gives?
They diversify there portfolios because they are informed about options with different risk/profit levels. The fact that you are all in to bitcoin or any single asset for that matter just make you look like either an uninformed person or a gambler.