Re:MicroStrategy's Bitcoin Debt Bet
by bluedevil2k on Monday December 14, 2020 @12:09AM
(#25413797)
I feel like I had these same discussions in 2017 when Bitcoin enthusiasts were saying it could only keep going up. New justifications for it to keep rising don’t outweigh the reality that no one knows what the future price will be.
And regarding Saylor, you say that holding it in cash is literally losing money - if Bitcoin drops 80% again, he’ll be losing a LOT more than the 1% he’d lose if he had cash.
I feel like I had these same discussions in 2017 when Bitcoin enthusiasts were saying it could only keep going up.
That was before institutional money and billionaires took it seriously. That was also before a global pandemic that has required virtually all central banks to inject trillions of dollars into the global economy to keep it afloat, inflating fiat currencies.
Saylor knows exactly what he's doing—a speculative attack [1]—when someone uses a shitty currency to acquire a much better currency or asset.
And as predicted by bitcoiners 6½ years ago [2].
[1] https://en.wikipedia.org/wiki/Speculative_attack
[2] https://nakamotoinstitute.org/mempool/speculative-attack/
Interest rates are close to zero; including inflation, if Saylor kept the company's treasury in cash (and cash equivalents), he's be losing money.
1. Not when corporations and billionaires are investing in it and are planning to hold it for a long time.
2. The dollar has lost 80% of its value in the last 80-90 years. And with no end in sight of the Fed printing trillions of dollars, the dollar is being debased as we speak.
3. The dollar may not be the global reserve currency for much longer; the US is only about 20% of global GDP [1].
[1] "The Fraying of the US Global Currency Reserve System"—https://www.lynalden.com/fraying-petrodollar-system/