You are probably invested in Bitcoin now

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bogivan
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You are probably invested in Bitcoin now

Post by bogivan »

For those that are new, welcome to the cryptocurrency club! :sharebeer

MicroStrategy, Inc, a NASDAQ-listed business intelligence company, has now exchanged over $400 million cash into bitcoin to hold as a primary treasury reserve - nearly a third of the market cap of the company. “This is not a speculation, nor is it a hedge,” said Saylor, the CEO, “I want something that I could put $425 million into for 100 years”

Vanguard Total Market Index holds MicroStrategy, so you - yes, even you bitcoin haters - now own something like 0.001% bitcoin for every dollar in VTSAX if I'm doing my very quick math correctly. I look forward to celebrating our bitcoin gains together in the next bitcoin bull market! :mrgreen:
lgs88
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Re: You are probably invested in Bitcoin now

Post by lgs88 »

Sacrebleu!! Heresy!!! A capital crime!!!!

I'm on the phone with Edward Jones moving my money this very moment. Indexing is toast, if indexing means owning Bitcoin.

In all seriousness -- this is no sillier than the phenomenon of a few years ago, when iced tea manufacturer microcaps would "pivot to blockchain" and spike 200% overnight. Glad I've got my 0.00001% exposure, for better or for worse.
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Random Musings
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Re: You are probably invested in Bitcoin now

Post by Random Musings »

You can put $425MM in a lot of things for 100 years, or even longer. Gold is one good example. However, there are no guarantees that it will pan out.

RM
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nisiprius
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Re: You are probably invested in Bitcoin now

Post by nisiprius »

Yep, there it is in VTI:
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Tingting1013
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Re: You are probably invested in Bitcoin now

Post by Tingting1013 »

There’s much higher exposure via NVDA, which counts crypto miners as a core customer segment.
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David Jay
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Re: You are probably invested in Bitcoin now

Post by David Jay »

Serious disconnect here -

1. MSTR has a market cap of $30 Million

2. MSTR claims to hold $400 Million worth of Bitcoin

Perhaps the bitcoin holding has a “discounted valuation”?
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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tooluser
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Re: You are probably invested in Bitcoin now

Post by tooluser »

bogivan wrote: Tue Sep 15, 2020 8:49 pm Vanguard Total Market Index holds MicroStrategy, so you - yes, even you bitcoin haters - now own something like 0.001% bitcoin for every dollar in VTSAX if I'm doing my very quick math correctly. I look forward to celebrating our bitcoin gains together in the next bitcoin bull market! :mrgreen:
Indeed, that's what total market index investing is all about. MicroStrategy will earn or lose profits by the quality of its business strategies and the merits of its corporate actions. Index funds will profit or lose proportionately accordingly. I hope they do well.
Tingting1013
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Re: You are probably invested in Bitcoin now

Post by Tingting1013 »

David Jay wrote: Tue Sep 15, 2020 9:15 pm Serious disconnect here -

1. MSTR has a market cap of $30 Million
$1.5B

And you’ll note the stock skyrocketed on this announcement
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bogivan
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Re: You are probably invested in Bitcoin now

Post by bogivan »

lgs88 wrote: Tue Sep 15, 2020 8:59 pm In all seriousness -- this is no sillier than the phenomenon of a few years ago, when iced tea manufacturer microcaps would "pivot to blockchain" and spike 200% overnight.
I think a 1.5 billion market cap, NASDAQ-listed company putting 2-8 microcap-sized companies worth of their excess cash into bitcoin is quite a different thing from microcap naming gimmicks during the 2017 bubble...
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Re: You are probably invested in Bitcoin now

Post by Normchad »

Interesting. I remember MicroStrategy, from back in the day. They were at various points, a high flying company. I think they ended up going to court or big SEC problems, something like that. It was pretty news worthy at the time. They seemed like a "chameleon" of a company, that would quickly change their focus in life, depending on what was in fashion at the time. (Did they try to start a university?)

Anyway, really surprised they are still around, and still run by Mr. Taylor.
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Re: You are probably invested in Bitcoin now

Post by Impatience »

I’m sure index fund and ETF owners are unwitting possessors of much more dubious assets than a few fractions of bitcoin. Who knows what kind of fraudulent dealings are afoot at some of those companies. But that’s why we’re diversified ... VTSAX could be 5% bitcoin and it still probably wouldn’t matter that much.
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Re: You are probably invested in Bitcoin now

Post by Normchad »

Impatience wrote: Tue Sep 15, 2020 9:34 pm I’m sure index fund and ETF owners are unwitting possessors of much more dubious assets than a few fractions of bitcoin. Who knows what kind of fraudulent dealings are afoot at some of those companies. But that’s why we’re diversified ... VTSAX could be 5% bitcoin and it still probably wouldn’t matter that much.
Good point. If I personally vetted every company in an index, I'm certain I would find something personally objectionable with every one of them. And I just don't have the time and energy to do that anyway.
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Re: You are probably invested in Bitcoin now

Post by Nate79 »

Great. This is exactly how I want to hold bitcoin. By having businesses somehow making money off of it, using it in a productive way, vs speculating on it like a commodity.
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Re: You are probably invested in Bitcoin now

Post by Northern Flicker »

bogivan wrote: Tue Sep 15, 2020 8:49 pm For those that are new, welcome to the cryptocurrency club! :sharebeer

MicroStrategy, Inc, a NASDAQ-listed business intelligence company, has now exchanged over $400 million cash into bitcoin to hold as a primary treasury reserve - nearly a third of the market cap of the company. “This is not a speculation, nor is it a hedge,” said Saylor, the CEO, “I want something that I could put $425 million into for 100 years”

Vanguard Total Market Index holds MicroStrategy, so you - yes, even you bitcoin haters - now own something like 0.001% bitcoin for every dollar in VTSAX if I'm doing my very quick math correctly. I look forward to celebrating our bitcoin gains together in the next bitcoin bull market! :mrgreen:
I don't hold it, as I use a Russell 1000 fund for US equity exposure, but honestly, I can live without a tech company struggling to disambiguate tech from finance.
Last edited by Northern Flicker on Tue Sep 15, 2020 11:28 pm, edited 1 time in total.
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Re: You are probably invested in Bitcoin now

Post by ChinchillaWhiplash »

Well in Sept 30, 2001 Vanguard 500 fund had the 5th Largest Mutual fund holding of ENRON shares. Think that ended up OK :mrgreen:
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Re: You are probably invested in Bitcoin now

Post by HawkeyePierce »

I would imagine VTI already held some Bitcoin via Square as they've been quite active in crypto for a while now.
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Re: You are probably invested in Bitcoin now

Post by Northern Flicker »

MSTR seems to have gone public in June 1998. Performance relative to the total market index:

http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

It is a tech company that seems to have missed the recent tech boom.
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firebirdparts
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Re: You are probably invested in Bitcoin now

Post by firebirdparts »

When you put it that way, this thread starts looking like an argument for actively managed funds.
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Northern Flicker
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Re: You are probably invested in Bitcoin now

Post by Northern Flicker »

My last post would actually be an argument against active mgmt. If MSTR is misallocating capital by holding 1/3 of its market cap in Bitcoin, this does not harm investors in a total market fund given its tiny percentage of the total market cap, but holding MSTR at a much higher weight would be quite risky.

I have held exclusively an R1000 fund for US equity since 6/2017 to improve perceived correlations with other assets, not to avoid stocks like MSTR.
Risk is not a guarantor of return.
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Robert T
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Re: You are probably invested in Bitcoin now

Post by Robert T »

Normchad wrote: Tue Sep 15, 2020 9:31 pm Interesting. I remember MicroStrategy, from back in the day. They were at various points, a high flying company. I think they ended up going to court or big SEC problems, something like that. It was pretty news worthy at the time. They seemed like a "chameleon" of a company, that would quickly change their focus in life, depending on what was in fashion at the time. (Did they try to start a university?)

Anyway, really surprised they are still around, and still run by Mr. Taylor.
Yes, I remember that.

MicroStrategy was the epitome of the dot.com boom and bust. Its split adjusted share price peaked at $3,330 on March 10, 2000. Current share price = $155.

I remember the Washington post did a four part series on Dot-com Halo: The Rise and Fall of Michael Saylor – that also covers the accounting irregularities, restating earnings, and the SEC investigation

https://www.washingtonpost.com/archive/ ... 7de3c8d67/
https://www.washingtonpost.com/archive/ ... 187913506/
https://www.washingtonpost.com/archive/ ... 9b993a226/
https://www.washingtonpost.com/archive/ ... daa39be60/

From the articles:
"Heaven for me is a microphone and a captive audience," Saylor said, and he relished the gamesmanship of sales and motivational talks, "that deer-in-the-headlights moment when you know you've flipped someone," he said in 1998.
In early 2000, investors were falling heavily for "Mike's Come-to-Jesus speech," as some MicroStrategists called it. .... Friends and aides warned Saylor to tone down the rhetoric, telling him he risked sounding offensive or ridiculous. His staff and MicroStrategy's board members reminded him to stay focused on business "fundamentals" -- operations, finance, customer service. But Wall Street was the oracle that Saylor heeded the most,
In late 1999 and early 2000, a recurring source of Saylor's fascination -- and, in turn, the media's -- was his plan to build a "Versailles" on 48 acres in Great Falls. He issued a 100-page request for proposals from architects and sent memos to his public relations staff that outlined some basic features he envisioned for his compound -- rooftop conservatory, nine-hole golf course, Japanese gardens. He referred to the compound as "my 21st-century villa,"
Then things fell apart... But he does have some resilience - he is still CEO of MicroStrategy which is still around.
.
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David Jay
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Re: You are probably invested in Bitcoin now

Post by David Jay »

Tingting1013 wrote: Tue Sep 15, 2020 9:20 pm
David Jay wrote: Tue Sep 15, 2020 9:15 pm Serious disconnect here -

1. MSTR has a market cap of $30 Million
$1.5B

And you’ll note the stock skyrocketed on this announcement
Okay, but the point remains that from the data of Nisi’s search tool (Q-2?), MSTR had some $400M in invested assets and a $30M market cap. Not exactly a ringing endorsement of management performance.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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bogivan
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Re: You are probably invested in Bitcoin now

Post by bogivan »

HawkeyePierce wrote: Tue Sep 15, 2020 11:35 pm I would imagine VTI already held some Bitcoin via Square as they've been quite active in crypto for a while now.
True, though I don't believe Square tries to hold bitcoin or, at least, I don't believe they publicly state their intention to keep any for themselves and don't split it out on their balance sheet.

There is also Riot Blockchain in VTSAX/VTI which is a 140 million market cap bitcoin mining stock that has some cryptocurrency on the balance sheet, but again I think their goal is not necessarily to hold it themselves after mining and we're talking about 5-10 million amounts versus the 400 million now added by MicroStrategy.
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bogivan
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Re: You are probably invested in Bitcoin now

Post by bogivan »

David Jay wrote: Wed Sep 16, 2020 8:10 am
Tingting1013 wrote: Tue Sep 15, 2020 9:20 pm
David Jay wrote: Tue Sep 15, 2020 9:15 pm Serious disconnect here -

1. MSTR has a market cap of $30 Million
$1.5B

And you’ll note the stock skyrocketed on this announcement
Okay, but the point remains that from the data of Nisi’s search tool (Q-2?), MSTR had some $400M in invested assets and a $30M market cap. Not exactly a ringing endorsement of management performance.
I don't know what Nisi's search tool is, but VTSAX happens to own something like $30M worth of MSTR - is that what you were looking at?

Current share price is around $155 and number of shares is 9.686 million = 1.508 billion market cap.
Tingting1013
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Re: You are probably invested in Bitcoin now

Post by Tingting1013 »

David Jay wrote: Wed Sep 16, 2020 8:10 am
Tingting1013 wrote: Tue Sep 15, 2020 9:20 pm
David Jay wrote: Tue Sep 15, 2020 9:15 pm Serious disconnect here -

1. MSTR has a market cap of $30 Million
$1.5B

And you’ll note the stock skyrocketed on this announcement
Okay, but the point remains that from the data of Nisi’s search tool (Q-2?), MSTR had some $400M in invested assets and a $30M market cap. Not exactly a ringing endorsement of management performance.
As OP points out right above this post, your interpretation of the numbers is incorrect.

Stock is up another 10% today after gaining 10% yesterday. How’s that for an endorsement of management performance?
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Re: You are probably invested in Bitcoin now

Post by Jack FFR1846 »

Are any of the other "total US market" type funds in this clownshow? SCHB, and the like? I don't see it in the SCHB "all holdings". Time to check basis in VTI.
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Re: You are probably invested in Bitcoin now

Post by brad.clarkston »

Tingting1013 wrote: Wed Sep 16, 2020 12:35 pm
David Jay wrote: Wed Sep 16, 2020 8:10 am
Tingting1013 wrote: Tue Sep 15, 2020 9:20 pm
David Jay wrote: Tue Sep 15, 2020 9:15 pm Serious disconnect here -

1. MSTR has a market cap of $30 Million
$1.5B

And you’ll note the stock skyrocketed on this announcement
Okay, but the point remains that from the data of Nisi’s search tool (Q-2?), MSTR had some $400M in invested assets and a $30M market cap. Not exactly a ringing endorsement of management performance.
As OP points out right above this post, your interpretation of the numbers is incorrect.

Stock is up another 10% today after gaining 10% yesterday. How’s that for an endorsement of management performance?
People always flock to a snake oil salesman.
Tingting1013
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Re: You are probably invested in Bitcoin now

Post by Tingting1013 »

brad.clarkston wrote: Wed Sep 16, 2020 12:58 pm
Tingting1013 wrote: Wed Sep 16, 2020 12:35 pm
David Jay wrote: Wed Sep 16, 2020 8:10 am
Tingting1013 wrote: Tue Sep 15, 2020 9:20 pm
David Jay wrote: Tue Sep 15, 2020 9:15 pm Serious disconnect here -

1. MSTR has a market cap of $30 Million
$1.5B

And you’ll note the stock skyrocketed on this announcement
Okay, but the point remains that from the data of Nisi’s search tool (Q-2?), MSTR had some $400M in invested assets and a $30M market cap. Not exactly a ringing endorsement of management performance.
As OP points out right above this post, your interpretation of the numbers is incorrect.

Stock is up another 10% today after gaining 10% yesterday. How’s that for an endorsement of management performance?
People always flock to a snake oil salesman.
So I guess no one knows better than the market, except when it contradicts your predisposed biases?
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bogivan
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Re: You are probably invested in Bitcoin now

Post by bogivan »

Jack FFR1846 wrote: Wed Sep 16, 2020 12:57 pm SCHB, and the like? I don't see it in the SCHB "all holdings".
Yes, it looks like SCHB owns at least a half a million dollars worth of MSTR (page 49 if sorting in reverse by ticker)
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Re: You are probably invested in Bitcoin now

Post by brad.clarkston »

Tingting1013 wrote: Wed Sep 16, 2020 1:04 pm
brad.clarkston wrote: Wed Sep 16, 2020 12:58 pm
Tingting1013 wrote: Wed Sep 16, 2020 12:35 pm
David Jay wrote: Wed Sep 16, 2020 8:10 am
Tingting1013 wrote: Tue Sep 15, 2020 9:20 pm

$1.5B

And you’ll note the stock skyrocketed on this announcement
Okay, but the point remains that from the data of Nisi’s search tool (Q-2?), MSTR had some $400M in invested assets and a $30M market cap. Not exactly a ringing endorsement of management performance.
As OP points out right above this post, your interpretation of the numbers is incorrect.

Stock is up another 10% today after gaining 10% yesterday. How’s that for an endorsement of management performance?
People always flock to a snake oil salesman.
So I guess no one knows better than the market, except when it contradicts your predisposed biases?
I didn't say anything about the market, any biases is yours and yours alone.
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nisiprius
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Re: You are probably invested in Bitcoin now

Post by nisiprius »

I don't have any strong reaction. If it's a "gotcha," OK, ya got me.

But not really, because owning a share of stock in a business is not at all the same thing as owning that business's assets. It's basically a vote to elect a board, which in turn provides pressure on the board to act in the shareholders' interests and share in the profits of the business's operation (now or eventually).

I can't take a ExxonMobil stock certificate and walk into the lobby at 5959 Las Colinas Blvd., Irving, TX and an empty barrel and say "here's your stock certificate, now give me my share of all the oil I own."

Similarly I own (or am at least the "beneficial owner") of Barrick stock (in Total International) but I don't own any gold, I own stock in a business.

I own Canopy Growth stock, but I don't own any cannabis.

I own stock in Las Vegas Sands (in Total Stock), but I don't own any poker chips.

It's mildly interesting, but every six months or so the cryptocurrency enthusiasts overhype something as evidence of cryptocurrency's arrival--"you can buy sandwiches at Subway with bitcoin" when the truth is that you can buy sandwiches at one Subway out of the fourteen in Allentown, PA. First Crypto ETF Index Fund Launched!!! $HODL and you can find out where that went to. "Starbucks, Whole Foods, and Nordstroms accepting bitcoin for purchases" when they were doing a technology pilot to see if they could integrate with a payment processor's smartphone app--that never materialized, and would have paid them in dollars, not in bitcoin.

P.S. The Long Island Iced Tea company didn't just change its name to Long Blockchain. They put out press releases saying they had contracted to buy "1,000 Antminer S9 mining rigs and 1,000 APW3++ PSUs." Oddly, though, those contracts were all canceled and the rigs were never delivered.
Last edited by nisiprius on Wed Sep 16, 2020 1:56 pm, edited 4 times in total.
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firebirdparts
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Re: You are probably invested in Bitcoin now

Post by firebirdparts »

I am just thinking imagine having to own this and now NKLA. Some guys just can’t get enough of SEC investigators for some reason. I’m sure they dress nicely.
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shess
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Re: You are probably invested in Bitcoin now

Post by shess »

Impatience wrote: Tue Sep 15, 2020 9:34 pm I’m sure index fund and ETF owners are unwitting possessors of much more dubious assets than a few fractions of bitcoin. Who knows what kind of fraudulent dealings are afoot at some of those companies. But that’s why we’re diversified ... VTSAX could be 5% bitcoin and it still probably wouldn’t matter that much.
Your index investments likely hold companies whose relationship to Bitcoin is similar to Barrick's relationship to gold. *shrug*
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SmileyFace
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Re: You are probably invested in Bitcoin now

Post by SmileyFace »

Random Musings wrote: Tue Sep 15, 2020 9:03 pm You can put $425MM in a lot of things for 100 years, or even longer. Gold is one good example. However, there are no guarantees that it will pan out.

RM
"Gold" ... "Pan Out" - I see what you did there! LOL. (Did you? - look up origin of "pan out").
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Tamarind
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Re: You are probably invested in Bitcoin now

Post by Tamarind »

*shrug* Ok. I'm perfectly happy to hold it insofar as it's cap-weighted and part of the assets of a publicly traded company. If crypto actually begins to have serious impact on business operations then I'll be happy to see that grow. Plenty of wild models being tried out among the microcaps... That's what they are there for.
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Re: You are probably invested in Bitcoin now

Post by arcticpineapplecorp. »

the good news is it makes up less than 1/100th of 1% of the total stock market index fund.

so if it goes horribly awry, it has very little impact over my life savings.

back in 2017 I wrote about my neighbor who put significant money into bitconnect.

she lost that "investment" and all the money.

my portfolio's up since then.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
Northern Flicker
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Re: You are probably invested in Bitcoin now

Post by Northern Flicker »

bogivan wrote: Wed Sep 16, 2020 8:20 am
HawkeyePierce wrote: Tue Sep 15, 2020 11:35 pm I would imagine VTI already held some Bitcoin via Square as they've been quite active in crypto for a while now.
True, though I don't believe Square tries to hold bitcoin or, at least, I don't believe they publicly state their intention to keep any for themselves and don't split it out on their balance sheet.

There is also Riot Blockchain in VTSAX/VTI which is a 140 million market cap bitcoin mining stock that has some cryptocurrency on the balance sheet, but again I think their goal is not necessarily to hold it themselves after mining and we're talking about 5-10 million amounts versus the 400 million now added by MicroStrategy.
Regardless of one's view of Bitcoin, a Bitcoin miner is an actual business that is trying to achieve a future revenue stream, moving it from the realm of pure speculations to the realm of investments.
Risk is not a guarantor of return.
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Re: You are probably invested in Bitcoin now

Post by Random Musings »

DaftInvestor wrote: Wed Sep 16, 2020 2:43 pm
Random Musings wrote: Tue Sep 15, 2020 9:03 pm You can put $425MM in a lot of things for 100 years, or even longer. Gold is one good example. However, there are no guarantees that it will pan out.

RM
"Gold" ... "Pan Out" - I see what you did there! LOL. (Did you? - look up origin of "pan out").
Have panned for gold in the Black Hills of SD. Was fun, but no luck. A few people found small flakes but the troy weight was immaterial.


RM
I figure the odds be fifty-fifty I just might have something to say. FZ
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bogivan
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Re: You are probably invested in Bitcoin now

Post by bogivan »

MicroStrategy's decision to keep bitcoin as a reserve asset for their treasury savings instead of sitting on cash has, so far, paid off significantly: the market cap has increased to over $2B from under $1.5B when they exchanged into bitcoin just a few months ago.

Square also announced an allocation to Bitcoin on their books since MicroStrategy's announcement.

There is a now a website to track Bitcoin allocations of companies at https://bitcointreasuries.org/
spectec
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Re: You are probably invested in Bitcoin now

Post by spectec »

Still probably better to be indirectly involved in any any virtual currency than to have direct ownership. In the early drafts of the 2020 tax return, IRS has moved the dreaded "virtual currency" question front and center on the Form 1040. Most likely everybody must answer it now. Some tax preparers view this as a huge red flag in terms of raising the audit potential of any tax return showing a "Yes" answer to the question.
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Re: You are probably invested in Bitcoin now

Post by Fantomas »

bogivan wrote: Sat Nov 21, 2020 8:45 am MicroStrategy's decision to keep bitcoin as a reserve asset for their treasury savings instead of sitting on cash has, so far, paid off significantly: the market cap has increased to over $2B from under $1.5B when they exchanged into bitcoin just a few months ago.

Square also announced an allocation to Bitcoin on their books since MicroStrategy's announcement.
Personally, I expect much more to come. The CIO of Blackrock, Rick Rieder, praised Bitcoin a few days ago and said it could replace gold 'to a large extent': https://www.cnbc.com/2020/11/20/blackro ... tent-.html
columbia
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Re: You are probably invested in Bitcoin now

Post by columbia »

I don't have any exposure to the garbage company mentioned in the OP, but assume that any number of companies in Vanguard 500 own Bitcoin. Meh; lots of them own other commodities, too.
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Re: You are probably invested in Bitcoin now

Post by dru808 »

spectec wrote: Sun Nov 22, 2020 7:59 am Still probably better to be indirectly involved in any any virtual currency than to have direct ownership. In the early drafts of the 2020 tax return, IRS has moved the dreaded "virtual currency" question front and center on the Form 1040. Most likely everybody must answer it now. Some tax preparers view this as a huge red flag in terms of raising the audit potential of any tax return showing a "Yes" answer to the question.
If held in a trust such as gbtc and in an ira, what would be the answer to the question?
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bogivan
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Re: You are probably invested in Bitcoin now

Post by bogivan »

Fantomas wrote: Sun Nov 29, 2020 3:59 pm Personally, I expect much more to come. The CIO of Blackrock, Rick Rieder, praised Bitcoin a few days ago and said it could replace gold 'to a large extent': https://www.cnbc.com/2020/11/20/blackro ... tent-.html
It isn't Blackrock (yet), but at least 2 major funds have filed with the SEC to be able to hold bitcoin in just the past couple of weeks: the $9.2 billion hedge fund Skybridge Capital and Guggenheim's Macro Opportunities Fund that has $5.3 billion in assets.

I doubt many Bogleheads hold either of those, but it does seem that more investment funds are wanting exposure to BTC.
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bogivan
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Re: You are probably invested in Bitcoin now

Post by bogivan »

dru808 wrote: Sun Nov 29, 2020 4:16 pm
spectec wrote: Sun Nov 22, 2020 7:59 am Still probably better to be indirectly involved in any any virtual currency than to have direct ownership. In the early drafts of the 2020 tax return, IRS has moved the dreaded "virtual currency" question front and center on the Form 1040. Most likely everybody must answer it now. Some tax preparers view this as a huge red flag in terms of raising the audit potential of any tax return showing a "Yes" answer to the question.
If held in a trust such as gbtc and in an ira, what would be the answer to the question?
I'm hoping the IRS provides further guidance specifically about things like GBTC in the next few months as the guidance so far has been horrible, but I believe you would answer yes. If you're otherwise in doubt, you should probably answer yes because the IRS's definition of virtual currency is incredibly broad and at one point the guidance even said that you needed to answer yes if you had played games that had virtual currencies in-game - which is almost any game today. As far as I know they've not fully clarified their line between cryptocurrencies and game currencies nor why things like some digital gift cards, credit card rewards, website loyalty points, or frequent flyer miles wouldn't be considered "virtual currency" under their broad "digital representation of value" definition.

There is no evidence of audit increase due to answering "Yes" as far as I know. My understanding is that they're simply trying to scare people into filing their crypto capital gains taxes which are often not clearly reported on 1099 forms so many people don't understand that they need to do something - or like to plead ignorance. Putting the question on the form raises awareness and revenue quickly.

From what I've heard, the IRS will actually be using the question to potentially audit people who mark "No" but also have evidence of selling digital assets: this sets up a situation where you both lied on the question and omitted the income so the IRS has a much stronger case if they want to go after you.
occambogle
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Re: You are probably invested in Bitcoin now

Post by occambogle »

Regarding the IRS question “At any time in 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”. What I don't understand is... if you only bought bitcoin with fiat currency, not sold/traded anything, then that is not a taxable event, yet they are asking about it.
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whodidntante
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Re: You are probably invested in Bitcoin now

Post by whodidntante »

Tingting1013 wrote: Tue Sep 15, 2020 9:11 pm There’s much higher exposure via NVDA, which counts crypto miners as a core customer segment.
That only works if someone else is paying for the electricity or if the miner is really bad at accounting.
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ohboy!
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Re: You are probably invested in Bitcoin now

Post by ohboy! »

occambogle wrote: Sun Nov 29, 2020 11:46 pm Regarding the IRS question “At any time in 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”. What I don't understand is... if you only bought bitcoin with fiat currency, not sold/traded anything, then that is not a taxable event, yet they are asking about it.
Saw that too. Suffice to say the IRS has been fumbling this since day one. Despite the language including buying (not taxable), I think most people who bought only will not be checking that box.
bullmoose85
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Re: You are probably invested in Bitcoin now

Post by bullmoose85 »

columbia wrote: Sun Nov 29, 2020 4:15 pm I don't have any exposure to the garbage company mentioned in the OP, but assume that any number of companies in Vanguard 500 own Bitcoin. Meh; lots of them own other commodities, too.
This "garbage company" is up over 20% today and 98% in the last month.
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eye.surgeon
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Re: You are probably invested in Bitcoin now

Post by eye.surgeon »

How do companies like this maintain their listing on the NASDAQ is my question.
"I would rather be certain of a good return than hopeful of a great one" | Warren Buffett
chinchin
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Joined: Tue Nov 14, 2017 8:02 pm

Re: You are probably invested in Bitcoin now

Post by chinchin »

eye.surgeon wrote: Mon Nov 30, 2020 1:48 pm How do companies like this maintain their listing on the NASDAQ is my question.
Riot Blockchain is a Bitcoin miner and they are on the NASDAQ.
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