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"[We] spent months deliberating to determine our capital allocation strategy. Our decision to invest in Bitcoin at this time was driven in part by a confluence

by cs702 6y ago

"[We] spent months deliberating to determine our capital allocation strategy. Our decision to invest in Bitcoin at this time was driven in part by a confluence of macro factors affecting the economic and business landscape that we believe is creating long-term risks for our corporate treasury program ― risks that should be addressed proactively. Those macro factors include, among other things, the economic and public health crisis precipitated by COVID-19, unprecedented government financial stimulus measures including quantitative easing adopted around the world, and global political and economic uncertainty. We believe that, together, these and other factors may well have a significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types, including many of the assets traditionally held as part of corporate treasury operations." Wow.

caiobegotti 6y ago
It seems to be a common sentiment but the general business people can't completely back it with macro data so everyone just brace for impact... I assume these folks have actual intel to take this big decision.
- macspoofing 6y ago
  >I assume these folks have actual intel to take this big decision. They sure write like they do. But they act like gamblers hoping for the next big score.
  - diegocerdan 6y ago
    What if sentiment is blue-pilled and holding dollars is actually the gamble? You would be holding the wrong side of the stick. I would agree that dollars have little downside but the purchasing power degradation of dollars feels like a irremediable tax on savings. And hard money like gold, silver, Bitcoin or Ethereum a quite decent hedge.
    - take_a_breath 6y ago
      ==And hard money like gold, silver, Bitcoin or Ethereum a quite decent hedge.== Two of these things are not like the others.
    - macspoofing 6y ago
      >What if sentiment is blue-pilled and holding dollars is actually the gamble? Even if you have no confidence in the dollar, doesn't mean Bitcoin or crypto currencies are a good alternative. >And hard money like gold, silver, Bitcoin or Ethereum a quite decent hedge. That is a strong statement. There is no evidence that crypto currencies are a 'decent hedge' for anything.
  - kneel 6y ago
    >They sure write like they do. But they act like gamblers hoping for the next big score. Sounds like wall street
- wokwokwok 6y ago
  > I assume these folks have actual intel to take this big decision. Unfortunately, my experience working with MSTR has been that the expectation of competence isn't really born out in actual competence at a technical level. I suppose you can only hope that at a management level it's a different story. They certainly seem to sell their product very well.
- Havoc 6y ago
  >I assume these folks have actual intel to take this big decision. Short of a crystal ball I don’t see how
- throw1234651234 6y ago
  >I assume these folks have actual intel to take this big decision I assume it's "Our advisors can push mutual funds, they will be able to push trusts with the same fee structures and incentives to sell that hold an asset that has 10Xed before." That alone seems like enough. Let's say you don't believe BitCoin. If you have worked in finance, or had a financial advisor come to your company, you probably believe in their ability to sell. People still think financial "advisors" (Series 7/63, CFP) know something / have interests besides pushing mutual funds.
ausbah 6y ago
wasn't quanatative easing done for like a decade after tbe recession with no inflation? why is there any reason to think this time around will be different? scale?
- ta17711771 6y ago
  Scale indeed.
- rapsey 6y ago
  Because now money is given directly to people due to covid. Before money just went to wall street.
- diegocerdan 6y ago
  No inflation? Look what new money has bought and you will clearly see huge inflation: stocks and housing. We don't see shopping cart inflation because it's countered by the technological cheapening of the production. And the key fact that new money is not being given to people buying groceries.
  - mac01021 6y ago
    I never understood how anyone can find it remotely fair for the Fed to introduce new money into the economy by any means other than equal division between all citizens.
    - SpicyLemonZest 6y ago
      The Fed introduces new money into the economy through two major mechanisms: setting a target interest rate on overnight loans, and buying assets at market rates. It's not clear how either of those would be extended to an equal division between all citizens, the vast majority of whom don't want overnight loans and don't have financial assets they want to sell.
      - baconandeggs 6y ago
        Hence why they shouldn't do it.
bhaak 6y ago
I can totally believe how Bitcoin, Ethereum and the rest of the cryptocurrency space could go through another bubble (the last one was quite small if you compare it to the DotCom bubble and consider how much money is floating around nowadays). So I can imagine that this will turn into a big profit for them but the arguments are hilariously weak. Granted they will get a lot of PR out of it.
- lifty 6y ago
  Hilariously weak? I think they lay out a reasonable argument considering the amount of debt around the world and the fragility of the economy. The big question is: will we have deflation or inflation? I am not sure, but I doubt the USG will let itself go bankrupt.
  - DSingularity 6y ago
    Correction: the world won’t let the USG go bankrupt. American generals won’t just stand down, disband their forces, and turn in their boots. If the USG goes bankrupt a massive war will breakout. In the business world things have been going pretty well so if more taxes become necessary to prop up the USG they will happily oblige.
    - lifty 6y ago
      I agree with what you are saying, but even before that point, the USG which is sovereign over its money supply, will be able cover any liabilities it has by creating the necessary money. This is what I was alluding to when I mentioned that the USG won’t let itself go bankrupt. They will destroy the USD before going bankrupt, because the repercussions of going bankrupt are much worse than a lower valued USD. Also, the whole debt ceiling is a charade; the FED can and has monetized treasury debt without any fuss.
    - martinko 6y ago
      Inflating the debt away would actually be the opposite of bankruptcy.
  - 6y ago

by cs702 6y ago

caiobegotti 6y ago

It seems to be a common sentiment but the general business people can't completely back it with macro data so everyone just brace for impact... I assume these folks have actual intel to take this big decision.

macspoofing 6y ago
>I assume these folks have actual intel to take this big decision. They sure write like they do. But they act like gamblers hoping for the next big score.
- diegocerdan 6y ago
  What if sentiment is blue-pilled and holding dollars is actually the gamble? You would be holding the wrong side of the stick. I would agree that dollars have little downside but the purchasing power degradation of dollars feels like a irremediable tax on savings. And hard money like gold, silver, Bitcoin or Ethereum a quite decent hedge.
  - take_a_breath 6y ago
    ==And hard money like gold, silver, Bitcoin or Ethereum a quite decent hedge.== Two of these things are not like the others.
  - macspoofing 6y ago
    >What if sentiment is blue-pilled and holding dollars is actually the gamble? Even if you have no confidence in the dollar, doesn't mean Bitcoin or crypto currencies are a good alternative. >And hard money like gold, silver, Bitcoin or Ethereum a quite decent hedge. That is a strong statement. There is no evidence that crypto currencies are a 'decent hedge' for anything.
- kneel 6y ago
  >They sure write like they do. But they act like gamblers hoping for the next big score. Sounds like wall street
wokwokwok 6y ago
> I assume these folks have actual intel to take this big decision. Unfortunately, my experience working with MSTR has been that the expectation of competence isn't really born out in actual competence at a technical level. I suppose you can only hope that at a management level it's a different story. They certainly seem to sell their product very well.
Havoc 6y ago
>I assume these folks have actual intel to take this big decision. Short of a crystal ball I don’t see how
throw1234651234 6y ago
>I assume these folks have actual intel to take this big decision I assume it's "Our advisors can push mutual funds, they will be able to push trusts with the same fee structures and incentives to sell that hold an asset that has 10Xed before." That alone seems like enough. Let's say you don't believe BitCoin. If you have worked in finance, or had a financial advisor come to your company, you probably believe in their ability to sell. People still think financial "advisors" (Series 7/63, CFP) know something / have interests besides pushing mutual funds.

ausbah 6y ago

wasn't quanatative easing done for like a decade after tbe recession with no inflation? why is there any reason to think this time around will be different? scale?

ta17711771 6y ago
Scale indeed.
rapsey 6y ago
Because now money is given directly to people due to covid. Before money just went to wall street.
diegocerdan 6y ago
No inflation? Look what new money has bought and you will clearly see huge inflation: stocks and housing. We don't see shopping cart inflation because it's countered by the technological cheapening of the production. And the key fact that new money is not being given to people buying groceries.
- mac01021 6y ago
  I never understood how anyone can find it remotely fair for the Fed to introduce new money into the economy by any means other than equal division between all citizens.
  - SpicyLemonZest 6y ago
    The Fed introduces new money into the economy through two major mechanisms: setting a target interest rate on overnight loans, and buying assets at market rates. It's not clear how either of those would be extended to an equal division between all citizens, the vast majority of whom don't want overnight loans and don't have financial assets they want to sell.
    - baconandeggs 6y ago
      Hence why they shouldn't do it.

bhaak 6y ago

I can totally believe how Bitcoin, Ethereum and the rest of the cryptocurrency space could go through another bubble (the last one was quite small if you compare it to the DotCom bubble and consider how much money is floating around nowadays). So I can imagine that this will turn into a big profit for them but the arguments are hilariously weak. Granted they will get a lot of PR out of it.

lifty 6y ago
Hilariously weak? I think they lay out a reasonable argument considering the amount of debt around the world and the fragility of the economy. The big question is: will we have deflation or inflation? I am not sure, but I doubt the USG will let itself go bankrupt.
- DSingularity 6y ago
  Correction: the world won’t let the USG go bankrupt. American generals won’t just stand down, disband their forces, and turn in their boots. If the USG goes bankrupt a massive war will breakout. In the business world things have been going pretty well so if more taxes become necessary to prop up the USG they will happily oblige.
  - lifty 6y ago
    I agree with what you are saying, but even before that point, the USG which is sovereign over its money supply, will be able cover any liabilities it has by creating the necessary money. This is what I was alluding to when I mentioned that the USG won’t let itself go bankrupt. They will destroy the USD before going bankrupt, because the repercussions of going bankrupt are much worse than a lower valued USD. Also, the whole debt ceiling is a charade; the FED can and has monetized treasury debt without any fuss.
  - martinko 6y ago
    Inflating the debt away would actually be the opposite of bankruptcy.
- 6y ago