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The Bitbuy Brief: Microstrategy Goes Deeper

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January 29, 2021
Bitbuy Staff
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Issue #129

Thursday January 28th, 2021

Weekly Market Update:¬†$40K CAD ūüďą

Analysis: The market rebounded steadily today with volumes and prices jumping significantly compared to the 7-day trend. Bitcoin broke above $40,000 CAD after sitting below that level for several days.

Big Story: Microstrategy To Host BTC Event

 

Next Week, MicroStrategy, ‚ÄėThe¬†First Publicly Traded Company To Invest Significant Treasury Assets In [BTC],‚Äô Will Host Free A Virtual Conference Aimed At Educating Other Corporations On How To ‚ÄėPlug [BTC] Into Their Balance Sheet Or PnL]‚Äô – ¬†The¬†Conference Will Be Watched Closely To Gauge MicroStrategy‚Äôs Success In Promoting¬†The¬†Adoption Of BTC

The¬†February 3 and 4 conference, titled ‚ÄėBitcoin for Corporations,‚Äô was announced on January 12 by MicroStrategy CEO Michael Saylor.¬†The¬†first day will see presentations on tax, audit and legal considerations in regards to BTC hosted by attorneys specializing in digital assets and tax and accounting experts from Deloitte.

 

The¬†firm‚Äôs CEO Michael Saylor will also present¬†the¬†‚Äėvarious macroeconomic factors driving [BTC‚Äôs] adoption by corporations [and] institutional investors.‚Äô¬†The¬†second day will feature an ‚ÄėOverview of Strategic Vendors and Offerings in¬†the¬†Bitcoin Marketplace‚Äô during which executives from notable crypto firms such as Binance, Coinbase, Galaxy and Grayscale will present their services and outlook related to BTC.

 

In an interview Friday morning with CNBC, Saylor revealed that his firm will be open-sourcing documents and methodologies associated with¬†the¬†firm‚Äôs to-date purchase of ~70,784 BTC as part of¬†the¬†conference. In that interview, Saylor opined that 2021 will see corporations ‚Äė[embracing] [BTC] either on their balance sheet like we have, because it converts a liability into an asset, or they‚Äôre going to do what Square and PayPal and Grayscale have done and they‚Äôre going to build [BTC] into their products and services‚Ķ‚Äô

 

On Friday Morning, MicroStrategy announced purchasing an additional 314 BTC for USD 10M ‘at an average price of approximately $31,808 per [BTC].’¬†The¬†firm‚Äôs total BTC holding now stands are ~70,784 BTC, ¬†or USD ~2.37B.¬†The¬†firm‚Äôs stock has appreciated by 330% since its initial purchase of 21,454 [BTC] for USD250M in August 2020. Google searches for MicroStrategy peaked in¬†the¬†week of January¬†10 – 16, coinciding with¬†the¬†conference‚Äôs announcement.

 

Takeaway:¬†MicroStrategy‚Äôs 2 day conference will be a concerted pitch to corporations on¬†the¬†merits of embracing BTC. Saylor has to-date made his case clear on¬†the¬†merits of BTC as a treasury reserve asset. However,¬†the¬†conference will also feature material on¬†the¬†‚Äėways in which corporations can integrate with¬†the¬†Bitcoin monetary network.‚Äô

 

This implies¬†the¬†conference will provide equal focus on¬†the¬†practical use for BTC, in areas such payments, and its use in finance as a perceived hedge against inflation. Realistically, MicroStrategy‚Äôs overall approach to BTC is likely too extreme for most firms to replicate. That said, we think it‚Äôs entirely logical that¬†the, ‚Äėturnkey‚Äô teaching method MicroStrategy and Saylor are presenting could see other corporates make smaller entries into¬†the¬†space..

 

More Weekly Headlines

Anthony Scaramucci says¬†the¬†recent GameStop saga highlights a positive backdrop for Bitcoin. He says “The activity in Gamestop is more proof that Bitcoin is going to work” – link – @BusinessInsider

 

The SportX protocol, a Toronto-based betting platform built on smart contracts, has launched its native SportX Token (SX). The ERC-20 will serve as a governance token for the SportX betting platform. Рlink Р@SportX

Venture capital firm Union Square Ventures plans to allocate ~30% of its USD 250M Core 2021 Fund to crypto-related projects.¬†The¬†firm has previously invested in a number of crypto startups, including Coinbase’s 2013 Series A.¬†– link – @Coindesk

 

Crypto trading venue FTX has listed GameStop (GME) stock for tokenized spot and futures trading. The stock made headlines recently for its retail-led rally and subsequent delisting from popular trading platforms link Р@CoinTelegraph

 

Horizons ETFs Management has filed preliminary documents with the Ontario Securities Commission to launch a BTC ETF. The product would trade on the Toronto Stock Exchange under the ticker HBIT. Earlier this year,  Arxnovum Investments Inc. applied with regulators to list a BTC ETF on the Toronto Stock Exchange. Рlink Р@TheGlobeAndMail

A report from Standard & Poor‚Äôs highlighted¬†the¬†similarities between gold and BTC noting ‘parallels between¬†the¬†two assets have grown.’¬†The¬†report also claims that ‘[c]oncerns of bitcoin theft were rampant a few years ago’ but have since diminished as¬†the¬†asset ‘becomes more mainstream…’¬†The¬†report also notes that gold and BTC are ‘uncorrelated to other popular asset classes in portfolios, which provides evidence of their diversification benefits.‘ – link – @CoinDesk

 

A group of North Dakota state house members have introduced a bill that would allow a local state-owned bank to become a crypto custodian.¬†The¬†bill would also allow¬†the¬†bank,¬†the¬†Bank of North Dakota, to ‚Äėimplement a digital currency exchange’ and calls on¬†the¬†institution to implement a feasibility study of crypto business lines.¬†¬†– link – @The¬†Block

Crypto Media & Links

DISCLAIMER: Nothing in this newsletter should be considered investment advice. The opinions and analysis in this are those of the writer and not of Bitbuy. Buying and selling cryptocurrencies is not without risk.


Photo of Author Bitbuy Staff
Bitbuy Staff
Bitbuy is a Canadian owned and operated digital currency platform. Trade on Bitbuy.ca or on the Bitbuy app today.
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