Saylor, the Legend, Buys the Dip
Plus, Roe Decision Prompts Tone-deaf Crypto Plug
MicroStrategy CEO Michael Saylor continues to load up on Bitcoin, despite being underwater by $1.4 billion. Now that’s conviction.
Link to my 2021 article on Saylor
Saylor disclosed on Wednesday that his company had purchased another 480 Bitcoins for $10 million, at an average cost of $20,817 per coin. Bitcoin is down 70% from its all-time high of around $69,000.
MicroStrategy now holds 129,666 Bitcoins, with a cost basis of $30,664 per coin. With Bitcoin’s price hovering around $20,000 their holdings are now in the red by about $1.4 billion.
MicroStrategy now owns 1 of every 161 coins that exist.
Saylor and his team are taking a lot of heat, and the company’s stock price has suffered along with Bitcoin’s. (It’s fallen from $890 to $172!) He is not deterred from his long-term strategy. He notes that since their initial purchase in August, 2020, Bitcoin is up 70%.
MicroStrategy reportedly has used debt to finance much of its position, about $2.4 billion worth, leading to speculation that they may be facing a margin call if the price of Bitcoin drops much further. Saylor responds by saying that they have other collateral they can post, and are also earning free cash flow every month through operations.
Saylor, in a recent interview with Bloomberg, said:
“The bottom line is that the Bitcoin strategy is 10x better than any other alternative.”
Some Bitcoin believers are cheering Saylor on:
Should be interesting. Stay tuned.
Novogratz Uses Supreme Court “Roe” Decision to Pump Bitcoin
Why would someone tell the world that Bitcoin is not political, and then tie Bitcoin to a political statement? Bitcoin, a decentralized technology with no management, no employees, no facilities, is inherently apolitical. And Bitcoiners know this.
Mike Novogratz, CEO of Galaxy Investments, is taking some heat for a tweet he sent on Sunday (pictured above). He’s being roundly criticized for using the Supreme Court’s Roe v. Wade decision, basically overturning it, to shill for Bitcoin.
Novogratz, in response to critics, said, “The link is privacy. Freedom.”
OK. But the tone-deaf nature of his tweet, regarding a highly polarizing issue, could not be ignored.
Novogratz was having a bad month anyway. After pumping crypto coin Luna, even getting a tattoo of it, the coin unraveled along with its sister coin, Terra, in spectacular fashion. Terra was supposed to be a stablecoin, but proved to be anything but. It now trades at about $.04. So much for a digital dollar.
Luna dropped from $116 to a tiny fraction of a penny, as investors lost billions.
Grayscale’s ETF Conversion Application Denied by SEC
Decision to “protect investors” makes little sense.
The long-awaited decision on the conversion of the Grayscale Bitcoin Trust (GBTC) was expected to be released next Wednesday, July 6. The fund currently operates as a trust but wants to convert to an ETF, or exchange-traded fund. Well, Wednesday afternoon, the SEC surprised very few people and denied the application.
SEC Chair Gary Gensler’s call on this matter is considered extremely important for the future of GBTC and of Bitcoin as well. Approval of a spot Bitcoin ETF could open the door to millions of investors, especially institutions, that would be more comfortable investing in this type of vehicle.
Canada, Germany, and Australia are three of the many nations around the world that have already approved Bitcoin ETFs.
The SEC and Gensler had previously taken the following actions on the Bitcoin ETF issue:
Approved several Bitcoin Futures ETF products. These ETFs don’t hold actual Bitcoin, but rather buy the underlying futures contracts tied to Bitcoin. These include funds from ProShares, Valkyrie, and VanEck.
Approved the first Bitcoin Short ETF, the ProShares Short Bitcoin Strategy Fund (BITI). The fund allows investors to bet on a decline in the price of Bitcoin, and has attracted quite a bit of money since its debut on June 22nd.
Rejected at least twelve proposals for a Spot Bitcoin ETF, a vehicle that would invest in actual Bitcoin, similar to a stock ETF. These included proposals from Cathie Wood’s ARK Investors, the Winklevoss twins’ Gemini exchange, Fidelity Investments and VanEck Investments.
Gensler continues to say that the SEC is merely looking out for investors’ safety in rejecting or postponing approvals for spot ETFs. This is puzzling for many in the investing world. Futures contracts and short positions are generally deemed to be more risky than spot investments. This is true in stocks, bonds or commodities.
Over 11,000 comments and letters were submitted to the SEC regarding the application, and Grayscale says over 90% of them were supportive of the spot ETF product.
Grayscale, the world’s largest digital currency manager, had already threatened legal action should its conversion be rejected, according to CEO Michael Sonnenshein. “I think all options are on the table,” said the CEO. Well, it didn’t take them long. A lawsuit against the SEC was filed within an hour of the decision.
This could get even more interesting.
Recommended Bitcoin Tools, Platforms, Podcasts:
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Twitter - Follow The Bitcoin Files on Twitter at @BitcoinNewslet1 for all of my articles, commentary and links to my contributions to Bitcoin Magazine.
Medium - Check out my writings on Medium, including articles not featured in the newsletter. Join my 500 other followers who read and write about crypto. medium.com/@rickmulvey
Podcasts - To hear the top names in Bitcoin, and learn more than you could imagine, check out The Pomp Podcast with Anthony Pompliano, What Bitcoin Did with Peter McCormack, and The Wolf of All Streets Podcast with Scott Melker.
Issue No. 63, July 1, 2022
Rick Mulvey is a CPA, crypto consultant, and frequent contributor to Bitcoin Magazine. He writes about all things Bitcoin, and yells at the Yankees and Giants. He also runs marathons and makes wine, neither professionally.