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Shorting Bitcoin

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Re: Shorting Bitcoin

#31

Post by vidarh »

mjol wrote: post #18
brian_cloutier wrote: post #17

Earlier quoted context omitted.

Your answer only rephrases the question. The only way for it to hit $0 is if nobody is willing to buy the stock. This seems unlikely, given that the Bitcoin they're holding, even at 50% of present value, is still worth significantly more than $0.

The losses from their bitcoin position can exceed their current market cap.

Their Bitcoin holdings seems to add up to about half their current market cap, so that seems to make no sense.

EDIT: From [1]:

> “As of June 21st, 2021, MicroStrategy holds an aggregate of approximately 105,085 bitcoins, which were acquired at an aggregate purchase price of approximately $2.741 billion and an average purchase price of approximately $26,080 per Bitcoin, inclusive of fees and expenses.”

From [2]:

> Market cap: $6.08 Billion

So ~half, and average purchase price is still substantially below current BTC price.

[1] https://dailyhodl.com/2021/06/23/michael-saylors-microstrate...

[2] https://companiesmarketcap.com/microstrategy/marketcap/

Re: Shorting Bitcoin

#32

Post by temp8964 »

kebman wrote: post #25
danaris wrote: post #3

Earlier quoted context omitted.

From the second paragraph: > This is part of this blog’s Investing theme, whose Intro[0] makes it clear that I have no investment expertise and nobody should take this as investment advice, because it’s not. It’s just a bloggy disclosure of some of my own financial positions, which I owe readers anyhow. So...yeah, no one's claiming he has an edge or a good strategy. This is based on his beliefs , not intended as good…

If it's so biased and opinionated, what is its value to HN readers? Is there any merit to his opinion? Is there any proof?

Maybe next month the guy can write another post: "How to lose money quickly" and gets on the front page again! Win-Win!

Re: Shorting Bitcoin

#33

Post by vlovich123 »

SavantIdiot wrote: post #16
dmichulke wrote: post #11

Reminds me of the time when TSLA MCap got bigger than Volkswagen + BMW + Daimler + a few othere and I bought OTM puts. This was back when TSLA was at 160$ (800$ pre-split)

The difference is Tesla makes cars, good cars, that people can use. Bitcoin makes "investors."

The multiples that Tesla trades at arguably are on the assumption that they’ll crack self-driving first combined with their dominance in absorbing a good chunk of the green credits that they resell to other companies.

The former feels sufficiently far out that the multiple is irrational. The latter will start disappearing as competitors roll out their own EVs and government subsidies start disappearing.

Re: Shorting Bitcoin

#34

Post by errantmind »

Puts are fine but the swings will often get you liquidated if you use too much leverage. I personally wouldn't bet against Bitcoin knowing the state of the wider market (stocks at all time highs, inflation fears but also Fed rate hike fears). If inflation fears kick into high gear it could be enough to push BTC back to retest the ATH

Re: Shorting Bitcoin

#35

Post by __zack »

tempestn wrote: post #23

I've sold Tether for both USD and CAD without any issue or significant delay. What are the difficulties the author is referencing? (Asking genuinely, not arguing.)

The difference is between exchanging tether and redeeming tether. Exchanging tether is easy as long as there’s a counterparty willing to buy your tether in exchange for USD.

But in principle you should be able to go to the “tether mint”, give them your tethers, and they redeem them 1:1 to USD. Apparently this is not very straightforward to do.

This podcast episode covers the topic well: https://anchor.fm/cas-piancey/episodes/Tether-A-Stable-Discu...

Re: Shorting Bitcoin

#36

Post by [deleted] »

tessierashpool wrote: post #28
SavantIdiot wrote: post #16

Earlier quoted context omitted.

The difference is Tesla makes cars, good cars, that people can use. Bitcoin makes "investors."

OK, but Tesla makes cars that catch fire while parked, and their "profit" comes from selling carbon credits to GM and Fiat. I agree Tesla is less of a pyramid scheme, but I think it's still a pyramid scheme.

[deleted]

Re: Shorting Bitcoin

#37

Post by sonicggg »

The author is talking about buying puts. These have expiration dates and a set price. Not only he believes bitcoin will collapse, he is basically suggesting he has a crystal ball on when it's going to happen.

Re: Shorting Bitcoin

#38

Post by bawolff »

thinkingkong wrote: post #21
dmichulke wrote: post #11

Reminds me of the time when TSLA MCap got bigger than Volkswagen + BMW + Daimler + a few othere and I bought OTM puts. This was back when TSLA was at 160$ (800$ pre-split)

I think this is a good strategy if you look at the fundamentals. But the thing that's been making BTC work isn't the market or the technology, it's the behavior of other people. That's something that isn't taken into account in his list of justifications. People are behaving 'irrationally' and it's been working over and over again. It's created throngs of people who are believers and nothing will change their minds.…

Its been what? 10 years? That's not a huge amount of time to conclude people will never change their mind and btc will go to the moon forever.

Re: Shorting Bitcoin

#39

Post by speedgoose »

tessierashpool wrote: post #28
SavantIdiot wrote: post #16

Earlier quoted context omitted.

The difference is Tesla makes cars, good cars, that people can use. Bitcoin makes "investors."

OK, but Tesla makes cars that catch fire while parked, and their "profit" comes from selling carbon credits to GM and Fiat. I agree Tesla is less of a pyramid scheme, but I think it's still a pyramid scheme.

They invest a lot and not cars catching fire is unfortunately not that uncommon. I'm not sure Tesla is worse than the others. In electric cars, Hyundai and general motors got a few fires from LG batteries. If you think about ICE cars, its really not uncommon for them to burn too.

If you really think Tesla is a pyramid scheme, you should consider reading their financial reports and test drive a recent one. It's perhaps a bit overrated and the full self driving is not happening anytime soon, but it's a solid product.

Re: Shorting Bitcoin

#40

Post by peter422 »

vlovich123 wrote: post #33
SavantIdiot wrote: post #16

Earlier quoted context omitted.

The difference is Tesla makes cars, good cars, that people can use. Bitcoin makes "investors."

The multiples that Tesla trades at arguably are on the assumption that they’ll crack self-driving first combined with their dominance in absorbing a good chunk of the green credits that they resell to other companies. The former feels sufficiently far out that the multiple is irrational. The latter will start disappearing as competitors roll out their own EVs and government subsidies start disappearing.

Tesla is the absolute world leader in battery manufacturing. A lot of people are betting on that as well. Tesla has a lot of things going for it if you project what we are going to need in the future.

I’m not saying it is a good/bad investment but their entire car business could fade away and they could still be doing mega-business in other “green” business lines.

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