The Bitcoin Gold Rush Begins

“We just had the awful realization that we were sitting on top of a billion dollar ice cube that’s melting.” – Michael Saylor, CEO – Microstrategy (MSTR)

Over the past year we have written extensively about bitcoin (BTC) as an alternative asset class. You can read our articles here, here, here and here. It’s always important as a trader to understand the 30,000 foot view of the markets and readers should dedicate time to understanding the new world of finance which bitcoin is ushering in.

Last summer, Michael Saylor recognized his company had a giant problem. He was sitting with a billion dollars worth of cash on his balance sheet and inflation was projected to steal a minimum of $20 million per year. Saylor decided the best way to protect shareholders from the debasement of the company’s U.S. dollar cash was to swap it for bitcoin.

His company, Microstrategy was trading at $122 at the time. Saylor spent months studying bitcoin along with the legal implications of putting this alternative asset class on his balance sheet to replace the dollar. Since then, he’s plugged $1.1 billion of the company’s balance sheet into bitcoin.

If MicroStrategy liquidated its bitcoin reserves back into dollars now, it would get $3.45 billion. That’s an unrealized profit of $2.35 billion… or approximately 39x the company’s 2020 operating profits. The stock which was trading at $122 in August has traded as high as $1315 and as I write these words is trading at slightly over $1,000. This represents a 719% gain in the stock in 6 months.

The reason this is noteworthy and critical to understanding is that Michael Saylor recently open-sourced his playbook for corporations to learn how to place Bitcoin on their balance sheets. His event occurred February 3-5, 2021 and had 20,000 people register from over 1,000 different corporations. You can watch the recordings of the event here.

How do you buy? Where do you buy? When do you buy? How do you maintain custody of your bitcoin? Should you dollar-cost-average? Or should you buy all at once? What are the tax and regulatory implications? What are the security implications? How do you incorporate Bitcoin into your accounting practices? These are the questions that Michael Saylor answered throughout his three-day conference to over 1000 Treasury departments worldwide.

Here are key highlights from Saylor’s opening keynote:

“There’s a macroeconomic wind blowing – big – it’s gonna impact $400 trillion of capital. That capital is sitting in fiat instruments that are being debased. That capital is going to want to convert into strong money.”
“Every company has to make one of two choices. You either have to decapitalize, which is kind of like self destruct… or you have to recapitalize with an asset which is going to appreciate faster than the rate of monetary supply expansion. This is where bitcoin comes in.”

MicroStrategy is only the first of a much wider adoption trend that will eventually see governments and central banks move into bitcoin.

Once the new administration in the US government finalizes the next $1.9 trillion stimulus package, they will have increased the US dollar supply by 40% in the last 12 months.

Think about that for a minute.

There will be 40% more dollars floating around the economy.

Are you going to make 40% more this year than last year? Is your company growing revenues by more than 40% per year? If not, you are being debased. End of story.

This startling fact is completely ignored by most people in the mainstream dialogue. The focus has been on mitigating short term pain for individuals, small businesses, and investors. But we can’t make decisions that completely ignore the reality of long-term destruction.

It’s clear that the growing mainstream attention to cryptocurrency is a signal for more institutional adoption, which could bring more stability and liquidity to the markets. However, institutional stakeholders still remain cautious about the regulatory challenges that come with the shift from fiat to a crypto-based reserve.

There will be 40% more dollars floating around the economy.

Are you going to make 40% more this year than last year? Is your company growing revenues by more than 40% per year? If not, you are being debased. End of story.

There is no mention of the source of a brand promotional statement beyond referencing a forecast tool, which is part of the news information. Hence the content remains unchanged.

Vantagepoint A.I. Forecast

Vantagepoint A.I. Forecast looks to provide financial prediction insights for traders and investors.

This looks interesting if you want to do your own due diligence.

Vantagepoint forecast is an advanced machine learning solution used for prediction of financial asset movements.

Vantagepoint AI Forecast

Vantagepoint A.I. Forecast

This is where artificial intelligence comes in and why it is so powerful.

A.I., through advanced pattern recognition, analyzing tens of thousands of data points, and crunching millions of computations, finds the highest probability trades and is indispensable in separating fact from fiction.

The power of artificial intelligence is designed to keep you focused on the right side of the market at the right time. Never trading on hope or toxic emotions.

Isaac Newton stated that “a trend in motion, tends to remain in motion until it is stopped.” The risk today is too high for opinions or guesswork.

Remember that ai has defeated humans at Chess, Poker, Go and Jeopardy.

Why should trading be any different?

I invite you to learn how to forecast Bitcoin at our Next Live Training.

It’s not magic. It’s machine learning.

Make it count.

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The Bitcoin Gold Rush Begins