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The bull run is over? What if it doubles in 2025?

pavlov 2y ago
MicroStrategy seems heavily leveraged, which creates extra risk on the downside. If the underlying asset doubles, MicroStrategy roughly doubles. But if the underlying asset goes down by 50%, MicroStrategy is stuck paying interest on loans it took to buy an asset that’s now heavily underwater. It can suffer much worse than 50% in that scenario.
- jstanley 2y ago
  What kind of leverage creates risk on the downside without benefit on the upside?
  - pavlov 2y ago
    MicroStrategy’s stock price seems to roughly parallel the price of Bitcoin during this bull market. They are not a simple leveraged Bitcoin fund, but something more complicated where the founder’s personality plays a big role. So I guess the market doesn’t quite know how to value this admittedly unique approach, and it defaults to just following Bitcoin on the upside. Who knows what happens if there’s a crash.
    - 627467 2y ago
      > something more complicated where the founder's personality plays a big role Not to pretend that other leveraged funds founder's are equally known as saylor, but how do all other funds differentiate themselves? Is it the same to through money at one vs another?
      - pavlov 2y ago
        MicroStrategy is publicly listed, which is kind of special. I don’t think there’s a lot of celebrity investor hedge funds that are public. Bill Ackman’s Pershing Square is listed in London and trades at a substantial discount to net asset value (something like 30%). Maybe that’s an indication that markets find it hard to value these vehicles.
- Uw7yTcf36gTc 2y ago
  The loans are 0% interest.
- latchkey 2y ago
  > MicroStrategy seems heavily leveraged "seems"! https://www.youtube.com/watch?v=R87vco0jHvo https://www.youtube.com/watch?v=R87vco0jHvo
hlynurd 2y ago
"what if it does next year" is a near-complete summary of the thought process of crypto buyers
- BLKNSLVR 2y ago
  Please do some research. Yes, there are lots of degenerate gamblers, grifters, and scammers in the crypto scene, but any new platform that's in any way related to finance will attract that scum. If you spend a little while attempting to understand Bitcoin's reason for existence, it may start to make some sense. You don't have to buy in, but you will be able to provide a more educated contribution to the discussion.
baq 2y ago
Smart money wins both ways. Saylor will get zeroed eventually, but when that happens is anyone’s guess.
BLKNSLVR 2y ago
To clarify: I wasn't saying the bull run is over, I'm saying it'll likely end some time in 2025, likely late in 2025, if history rhymes. That's what I meant about plenty of water to yet pass under the bridge. Like you said Bitcoin could still double from here.

MicroStrategy seems heavily leveraged, which creates extra risk on the downside. If the underlying asset doubles, MicroStrategy roughly doubles. But if the underlying asset goes down by 50%, MicroStrategy is stuck paying interest on loans it took to buy an asset that’s now heavily underwater. It can suffer much worse than 50% in that scenario.

jstanley 2y ago
What kind of leverage creates risk on the downside without benefit on the upside?
- pavlov 2y ago
  MicroStrategy’s stock price seems to roughly parallel the price of Bitcoin during this bull market. They are not a simple leveraged Bitcoin fund, but something more complicated where the founder’s personality plays a big role. So I guess the market doesn’t quite know how to value this admittedly unique approach, and it defaults to just following Bitcoin on the upside. Who knows what happens if there’s a crash.
  - 627467 2y ago
    > something more complicated where the founder's personality plays a big role Not to pretend that other leveraged funds founder's are equally known as saylor, but how do all other funds differentiate themselves? Is it the same to through money at one vs another?
    - pavlov 2y ago
      MicroStrategy is publicly listed, which is kind of special. I don’t think there’s a lot of celebrity investor hedge funds that are public. Bill Ackman’s Pershing Square is listed in London and trades at a substantial discount to net asset value (something like 30%). Maybe that’s an indication that markets find it hard to value these vehicles.
Uw7yTcf36gTc 2y ago
The loans are 0% interest.
latchkey 2y ago
> MicroStrategy seems heavily leveraged "seems"! https://www.youtube.com/watch?v=R87vco0jHvo https://www.youtube.com/watch?v=R87vco0jHvo

hlynurd 2y ago

"what if it does next year" is a near-complete summary of the thought process of crypto buyers

BLKNSLVR 2y ago
Please do some research. Yes, there are lots of degenerate gamblers, grifters, and scammers in the crypto scene, but any new platform that's in any way related to finance will attract that scum. If you spend a little while attempting to understand Bitcoin's reason for existence, it may start to make some sense. You don't have to buy in, but you will be able to provide a more educated contribution to the discussion.

baq 2y ago

Smart money wins both ways. Saylor will get zeroed eventually, but when that happens is anyone’s guess.

BLKNSLVR 2y ago

To clarify: I wasn't saying the bull run is over, I'm saying it'll likely end some time in 2025, likely late in 2025, if history rhymes. That's what I meant about plenty of water to yet pass under the bridge. Like you said Bitcoin could still double from here.