Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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That trade worked out well.
In my note <a href="https://skr.ma/eEB66" target="_blank" rel="noopener">Microstrategy (MSTR US): "Crypto Through The Tulips"</a> back on the 28 June, I recommended shorting <a href="https://www.smartkarma.com/entities/microstrategy-inc-cl-a" target="_blank" data-smartkarma-citation="entities:14717:1" rel="noopener">Microstrategy Inc Cl A (MSTR US)</a> and going long bitcoin.
MSTR is up 2.3% since, against 30% for BTC.
MSTR has a tendency to issue paper to buy more bitcoins when the stock is at a large premium to its Bitcoin holdings.  As per its <a href="https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/press-release-archive/microstrategy-acquires-additional-bitcoins-and-now-holds-over-105000-bitcoins-in-" target="_blank" rel="noopener">21 June 21</a> announcement, MSTR said it held 105,085 bitcoins. That figure remains unchanged.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/764/original/image_1404123321631156413189.png?1631156418" class="editor-image img-responsive" data-smartkarma-image-id="228764"></figure>
MSTR's share price was US$123 prior to its initial announcement on the 11 August 2020 it was "adopting Bitcoin as a primary treasury reserve asset".
The current implied value for MSTR's stub ops - selling business intelligence software - is US$158/share, having touched US$141/share, suggesting value was emerging.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/821/original/image_21363881771631163833057.png?1631163833" class="editor-image img-responsive" data-smartkarma-image-id="228821"></figure>
Yet is MSTR the ideal proxy for bitcoin? And just how much legitimacy should be attached to El Salvador giving bitcoin the status of legal tender?
More below the fold.
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That trade worked out well.
In my note Microstrategy (MSTR US): "Crypto Through The Tulips" back on the 28 June, I recommended shorting Microstrategy Inc Cl A (MSTR US) and going long bitcoin.
MSTR is up 2.3% since, against 30% for BTC.
MSTR has a tendency to issue paper to buy more bitcoins when the stock is at a large premium to its Bitcoin holdings.  As per its 21 June 21 announcement, MSTR said it held 105,085 bitcoins. That figure remains unchanged.

MSTR's share price was US$123 prior to its initial announcement on the 11 August 2020 it was "adopting Bitcoin as a primary treasury reserve asset".
The current implied value for MSTR's stub ops - selling business intelligence software - is US$158/share, having touched US$141/share, suggesting value was emerging.

Yet is MSTR the ideal proxy for bitcoin? And just how much legitimacy should be attached to El Salvador giving bitcoin the status of legal tender?
More below the fold.


Microstrategy (MSTR US): Bitcoin's Mainstream/Fringes Balancing Act

Full disclosure - I'm somewhat of a cryptocurrency sceptic. I think Bitcoin is not an "investment" but a "speculation." SEC officials have stated their view that bitcoin is not a “security” for purposes of the US federal securities laws. It has zero correlation with the real economy and zero fundamentals - and can potentially go to zero.  It is, in my view, digital Monopoly money.
I stop short of calling Bitcoin a Ponzi scheme. There are no centralised actors here primed to bail (or at least no publicly-self-identifying centralised actors)
BUT - and there's always a but - Bitcoin is a recognised commodity. And it is possible to obtain crypto Visa cards and store crypto in a PayPal account, which lends a certain confirmation bias with the support of these traditional financing systems. Or perhaps the transaction fees revolving around cryptos are simply too big to ignore. 
And there is an increasing number of jurisdictions world-wide granting money transmitter licenses to cryptocurrency exchanges - although news overnight of the UK watchdog banning crypto exchange Binance serves to illustrate the issues surrounding these regulated activities.  
This all brings us to <a href="https://www.smartkarma.com/entities/microstrategy-inc-cl-a" target="_blank" data-smartkarma-citation="entities:14717:1" rel="noopener">Microstrategy Inc Cl A (MSTR US)</a>. 
As of the<a href="https://www.microstrategy.com/en/investor-relations/press/microstrategy-acquires-additional-bitcoins-and-now-holds-over-105000-bitcoins-in-total_06-21-2021" target="_blank" rel="noopener"> 21 June</a> MicroStrategy holds  "approximately" 105,085 bitcoins, which were acquired at an aggregate purchase price of $2.741bn and an average purchase price of $26,080/ bitcoin.
Microstrategy is, in effect, a holding company for bitcoin. Stub ops are largely immaterial.
That stash of "coins" is currently worth US$3.6bn versus Microstrategy's current market cap of US$5.4bn. This is before factoring in the three hard-currency fund-raising exercises in the past six months. Mmm.
More below the fold.

Full disclosure - I'm somewhat of a cryptocurrency sceptic. I think Bitcoin is not an "investment" but a "speculation." SEC officials have stated their view that bitcoin is not a “security” for purposes of the US federal securities laws. It has zero correlation with the real economy and zero fundamentals - and can potentially go to zero.  It is, in my view, digital Monopoly money.
I stop short of calling Bitcoin a Ponzi scheme. There are no centralised actors here primed to bail (or at least no publicly-self-identifying centralised actors)
BUT - and there's always a but - Bitcoin is a recognised commodity. And it is possible to obtain crypto Visa cards and store crypto in a PayPal account, which lends a certain confirmation bias with the support of these traditional financing systems. Or perhaps the transaction fees revolving around cryptos are simply too big to ignore. 
And there is an increasing number of jurisdictions world-wide granting money transmitter licenses to cryptocurrency exchanges - although news overnight of the UK watchdog banning crypto exchange Binance serves to illustrate the issues surrounding these regulated activities.  
This all brings us to Microstrategy Inc Cl A (MSTR US). 
As of the 21 June MicroStrategy holds  "approximately" 105,085 bitcoins, which were acquired at an aggregate purchase price of $2.741bn and an average purchase price of $26,080/ bitcoin.
Microstrategy is, in effect, a holding company for bitcoin. Stub ops are largely immaterial.
That stash of "coins" is currently worth US$3.6bn versus Microstrategy's current market cap of US$5.4bn. This is before factoring in the three hard-currency fund-raising exercises in the past six months. Mmm.
More below the fold.

Microstrategy (MSTR US): "Crypto Through The Tulips"

Latest News from the World’s Leading Innovators

Granite Bay Capital

An innovation focussed investment company

Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

Thematic (Sector/Industry)

Headline developments are all up in the air this week, starting with United Airlines (UAL) who have signed an agreement with Boom Supersonic (private) to add 15 of their $200m jets to the fleet, with the option of adding an additional 35, after certain safety, sustainability and operating metrics are met.

Headline developments are all up in the air this week, starting with United Airlines (UAL) who have signed an agreement with Boom Supersonic (private) to add 15 of their $200m jets to the fleet, with the option of adding an additional 35, after certain safety, sustainability and operating metrics are met.

Alpha-Centric ESG Research

Kyle Rudden

This is a follow-up to <a href="https://www.smartkarma.com/insights/esg-and-bitcoin-the-truth-lies-somewhere-between-benign-and-boiling-off-oceans" target="_blank" data-smartkarma-citation="insights:52134" rel="noopener">ESG and Bitcoin: The Truth Lies Somewhere Between Benign and Boiling Off Oceans</a>, in which I discussed the ongoing cryptocurrency/ESG debate, and explained the reasoning behind my slightly positive long-term opinion of the issue (near-term negative, however).Essentially, it boiled down to the balance of Environmental, Social, and Governance issues. Proof-of-Work cryptocurrencies (especially Bitcoin) are an Environmental nightmare. However, there is reason for optimism (e.g., Ethereum 2.0), and some long-term Social issues are major positives.Nevertheless, the raging firestorm over cryptocurrency's Environmental footprint will be foremost on the minds of many ESG-minded investors. They will want avoid crypto at all costs. That is easy regarding direct exposure – just don't buy Bitcoin, Coinbase, or any other crypto pure-plays.Indirect cryptocurrency exposure is a different story altogether. As cryptocurrencies become more mainstream, the potential for indirect exposure increases – in probability, degree, and number of possible vectors. Some are hard to miss (e.g., Tesla), but others are much harder to identify.Ergo, this Insight. It covers the first of several emerging areas of potential indirect crypto exposure, specifically the growing cadre of listed companies putting crypto on the books; holding Bitcoins in treasuries for a variety of reasons, but primarily as a supposed super-hedge against inflation.It is written for the never-Bitcoin environmentalist investor, but with a little imagination any pro-Bitcoin investor can just flip its messages upside down. After all, whether indirect cryptocurrency exposure is an ESG risk or an ESG opportunity is entirely up to you to decide, for yourself.

This is a follow-up to ESG and Bitcoin: The Truth Lies Somewhere Between Benign and Boiling Off Oceans, in which I discussed the ongoing cryptocurrency/ESG debate, and explained the reasoning behind my slightly positive long-term opinion of the issue (near-term negative, however).Essentially, it boiled down to the balance of Environmental, Social, and Governance issues. Proof-of-Work cryptocurrencies (especially Bitcoin) are an Environmental nightmare. However, there is reason for optimism (e.g., Ethereum 2.0), and some long-term Social issues are major positives.Nevertheless, the raging firestorm over cryptocurrency's Environmental footprint will be foremost on the minds of many ESG-minded investors. They will want avoid crypto at all costs. That is easy regarding direct exposure – just don't buy Bitcoin, Coinbase, or any other crypto pure-plays.Indirect cryptocurrency exposure is a different story altogether. As cryptocurrencies become more mainstream, the potential for indirect exposure increases – in probability, degree, and number of possible vectors. Some are hard to miss (e.g., Tesla), but others are much harder to identify.Ergo, this Insight. It covers the first of several emerging areas of potential indirect crypto exposure, specifically the growing cadre of listed companies putting crypto on the books; holding Bitcoins in treasuries for a variety of reasons, but primarily as a supposed super-hedge against inflation.It is written for the never-Bitcoin environmentalist investor, but with a little imagination any pro-Bitcoin investor can just flip its messages upside down. After all, whether indirect cryptocurrency exposure is an ESG risk or an ESG opportunity is entirely up to you to decide, for yourself.

Bitcoin on Balance Sheets: Indirect Crypto Exposure Considerations for Crypto-Leery ESG Investors

United States

MicroStrategy Incorporated provides business intelligence software and related services.  The Company's technology platform enables departments and enterprises to deploy Web-based reporting and analysis solutions.  MicroStrategy also offers consulting, training, and support services.  Solutions are provided to retail, finance, telecommunications, insurance, dot-com, and healthcare industries.

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Microstrategy Inc Cl A (MSTR US)

Microstrategy (MSTR US): Bitcoin's Mainstream/Fringes Balancing Act

But my preference would be cryptocurrency exchange platforms, as they capture all key digital currencies, plus dumb down some of the volatility of...

David Blennerhassett

Microstrategy (MSTR US): "Crypto Through The Tulips"

At the current levels, I'd short Mictostratgy and go long BTC. Alternative conclusion to what one investor deemed Microstrategy to be a bitcoin...

David Blennerhassett

Weekly Innovation Review (WIRE) #35

Headline developments are all up in the air this week, starting with United Airlines (UAL) who have signed an agreement with Boom Supersonic

Granite Bay Capital

Bitcoin on Balance Sheets: Indirect Crypto Exposure Considerations for Crypto-Leery ESG Investors

Companies are increasingly embracing cryptocurrencies as a corporate treasury management strategy. This looks at some representative companies with...

Kyle Rudden

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