pull down to refresh
61 sats \ 13 replies \ @Undisciplined 2 Jan \ on: MONEY CLASS OF THE DAY: Yes, We Can Have More Than 21 Million' Worth of BTC econ
There's something a little goofy about using price times quantity to get company valuation, which might be part of the intuition here. If Elon Musk decided to sell off all of his Tesla shares, they would obviously go for much less than the current trading price (even ignoring what his selling would signal to investors). One problem with this thought experiment is that it ignores what they're worth to Elon.
Another thought about what this silly take is missing is that someone could buy the entirety of Microsoft shares for a stream of payments, rather than a lump sum. It's easy enough to work out the present discounted value of a stream of revenue and there's no reason at all that a stream of revenue can't be worth more than the stock of money.
indeed, indeed.
Everybody sort of knows that issue with market caps... everyone gets it, take the numbers with a grain of salt. Except, it seems, Bitcoiners.
reply
Everybody sort of knows that issue with market caps... everyone gets it, take the numbers with a grain of salt. Except, it seems, Bitcoiners.
Case in point: Microstrategy. When people say that MSTR's strategy of issuing shares to buy bitcoin is non-dilutive because bitcoin price goes up, I always start thinking about this issue. I believe in the accounting world it's known as "mark to market" accounting, and it works well enough for companies holding a small amount of any given asset, but not when they're a huge part of the market.
reply
the strategy is non-dilutive because btc per share goes up
Increasing the number of shares is dilutive but the strategy is accretive because btc per share rises
reply
The classic "Compared to what?" rears its head.
reply
BTC Yield:
MicroStrategy’s key metric is BTC Yield, which measures the rate of increase in Bitcoin per share.
This is the main indicator of the company’s success in acquiring more Bitcoin in a way that benefits shareholders without diluting their holdings.
Their focus is on acquiring Bitcoin in a creative manner that increases the amount of Bitcoin per share, ensuring long-term value creation for shareholders.
reply
Interesting. That does make sense to me. But I think undisciplined's point was whether buying a MSTR share gets you more bitcoin vs just buying bitcoin directly
reply
I misunderstood
Buying bitcoin directly gets you more bitcoin
Except I can't buy bitcoin for my retirement accounts
reply
Hahaha, everyone misunderstood my point, but it led to a better discussion.
from 2012
reply
reply
When you don't know what either the supply or demand curves look like, it's reasonable enough (I guess) to just do p*q for total value. If something were obviously more accurate, we'd use it.
reply