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35 sats \ 5 replies \ @Satosora 11 Oct \ on: MicroStrategy's $3.9B Bitcoin Play: Use Saylor’s Infinite Money Glitch! econ
This infinite money glitch only works if you have the assets to back it up.
He used microstrategy initially, and his controlling shares.
Plus, if everyone did this to buy bitcoin, what would happen to the supply and the price?
The price would go to where it should be. This is a dramatic example of economic arbitrage. In equilibrium, these opportunities don't exist, but entrepreneurs take advantage of them while the economy is out of equilibrium.
You're right that you need underlying assets or revenue to implement this strategy.
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You certainly could, just not to the same degree.
The cleanest example he gives is that people will often pay down more of the principle on their loans than they have to. If they put that extra money into Bitcoin, they'd be using the MSTR strategy.
People who are completely budget constrained can't do this, but most people aren't actually fully budget constrained (they're just overconsuming).
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There's no obligation to become wealthy.
The point is just that most people could take advantage of this strategy, if they were so inclined.
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