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MicroStrategy and Bitcoin: Will They Turn into Smithereens?

by with No Comment AMT MarketsAssetsFeatured Highlights

MicroStrategy and Bitcoin: Will They Turn into Smithereens?

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MicroStrategy One Year Chart as of 25th January 2025

MicroStrategy near 353.67 per yesterday’s close. Bitcoin around $104,625 this morning. Will the balloons keep inflating or become smithereens? The combo of MSTR and BTC/USD are combustible.

MarketWatch has published an excellent article on the borrowing via bonds that MicroStrategy is undertaking with investors. https://www.marketwatch.com/story/why-investors-are-lending-microstrategy-billions-of-dollars-at-0-interest-so-it-can-buy-bitcoin-03f7cacf The article highlights the red hot glow that some investors are pursuing via bets on MicroStrategy and Bitcoin.

MSTR has turned from a data driven company that produces revenue into a proxy bet on Bitcoin. Not everyone is a fan. As of late November 2024 Citron Capital has been reported to be ‘shorting’ MicroStrategy.

Students intrigued by the art of speculation, finance and business outlook have an active case study via MicroStrategy. This is a saga which will continue to grow in stature as investors and speculators seek profits. While the potential for disaster remains high, Michael Saylor of MicroStrategy and his cult like leadership capabilities has led his flock of believers into a golden land for now, but what storms await?

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BTC/USD One Year Chart as of 25th January 2025

Naysayers of MicroStrategy’s foray into Bitcoin have thus far been proven wrong. Michael Saylor and his legions will continue singing praises about Bitcoin and its ability to turn into the modern version of gold, but perhaps it will turn into a digital asset nightmare. However, there is no denying the strength of the trend which has manifested the past year in both MSTR and BTC/USD. With the advent of President Trump and his seemingly pro digital asset stance being taken; and the growing desire by some crowds to turn fiat currencies which have been paper based into Central Bank Digital Currencies (CBDC) there are likely years left in this saga to unfold.

There has been a growing clamor for central banks to start holding some of their reserves in Bitcoin instead of gold, but for the moment this seems like too wild a thought and a purely speculative notion. Wagering on the confidence generated by digital hype with little intrinsic value, except the ability to create hot air via rhetoric and lofty visions of grandeur still appears to a step too far for most central bankers. Speculating on MicroStrategy and Bitcoin is one of the ultimate bets looking to take advantage of behavioral sentiment in the digital asset realm. MSTR and BTC/USD are highly volatile and have certainly created profits, but the combination could also turn into a horror if things go wrong.

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AMT Top Ten Miscellaneous Reckonings for the 8th of December

by with No Comment Behavioral SentimentCommoditiesFeatured Highlights

AMT Top Ten Miscellaneous Reckonings for the 8th of December

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10. France Falls: President Macron’s leadership is in peril after his anointed Prime Minister, Michael Bernier, suffered a no confidence vote outcome. French politics and finances are in shambles. Life for French citizens goes on as their politicians battle for their jobs, supremacy of voice and egos. With the restoration and presentation publicly of Notre Dame Cathedral yesterday, Macron now has to find something else to divert attention away from his misappropriation of power.

9. 100,000: Bitcoin came within sight of the 104,000 USD vicinity this Thursday, then sunk with a rapid pace and challenged 92,000. Once again traversing near 100 grand, large BTC whales and MicroStrategy’s Michael Saylor and his cult of followers are likely celebrating. However, if the wind changes direction what kind of damage will the low tides create this time for Bitcoin and speculative leveraged positions? The price of BTC/USD as of this writing is near 99,500.

8. Al-Assad: The Syrian regime is apparently coming to an end after 50 plus years in power. Bashar al-Assad’s whereabouts are unknown. Russia, Iran and Hezbollah appear for the moment to be big losers in this power play. The many factions will now have to see if they can create a semblance of government, but that remains doubtful. Syria will be a quagmire in the coming months as its cauldron stirs.

7. Martial Law: South Korean President Yoon Suk Yeol startled Asia and foreign investors by declaring martial law this past week, making one of the worst political miscalculations in recent memory. Yoon was quickly forced to rescind the decision. The USD/KRW spiked and KOSPI Composite sank via the instability. However, the South Korean National Assembly has shown the ability to provide leadership and display power of law prevails, this as they try to calm their citizens concerns and investor sentiment.

6. Roasted: Coffee Arabica has boiled again and commodity’s price is fighting within apex levels. Like Cocoa, both Arabica and Robusta Coffee have surged the past year as large players have created a strangulated grip which suggests the markets may be ‘cornered’. While some analysts are quick to point out weather conditions as a reason for the higher prices, the tenacity of Coffee and Cocoa to sustain upwards momentum is intriguing but also suspicious.

5. FX and Data: U.S jobs numbers this Friday were marginally better than anticipated and the Average Hourly Earnings came in slightly above expectations. Economists from different schools of thought are debating the potential of recession and inflation concerns, versus those who believe growth, greater transparency of U.S fiscal mandates and elimination of a bloated budget will be achieved when Trump’s economic policies takeover. Globally Forex conditions are showing signs of fragility because of the threat of tariffs and trade concessions by nations which may need to be made. Yet, it is quite possible the ‘bad news’ consisting of accusations of unfair trade agreements by Trump, and the reactions which have been cooked into the EUR, GBP, JPY, ZAR, MXN, CAD, NZD and others is overdone. While there could certainly be more weakness in major global currencies paired against the USD, upside potential mid-term may be more positive compared to near-term drawdowns. Retail traders still face difficult technical perceptions in the days ahead because financial institutions also remain shaky regarding their outlooks.

4. Pardon Me Joe: President Biden has forgiven his son, Hunter Biden, for crimes known and unknown for an eleven year period – that is not a round number ladies and gentlemen, with a Presidential Pardon. Why 11 years? Why not 10 or 15? There is conjecture that Joe Biden is also considering preemptive pardons for people his administration feels may face the wrath of the incoming Trump White House. However, if pardons are given to the likes of Anthony Fauci, won’t the pardons awarded to those who have not been charged with a crime yet look like an admission of guilt?

3. Central Banks: The ECB will deliver their interest rate decision on the 12th and the Federal Reserve will announce their Fed Funds Rate on the 18th. Behavioral sentiment however is seemingly more focused on the threat of potential storms that could suddenly appear due to the Trump effect. The ECB and Fed are both expected to cut their interest rates by a quarter of a point, while it appears many financial institutions no longer believe the Fed will cut again in January.

2. Chinese Gold: Tucked away in the quiet corners of the business news has been the discovery of a massive gold ore deposit in China. Some geologists claim the Wangu gold field could have up to 1,100 tons of the precious metal. If correct and the amount of gold meets or exceeds the expectations of the experts, the question about this becoming a deflationary event for gold is intriguing but likely wrong. Importantly, the gold will be a long-term benefit for China and potentially create a stronger national currency via the Renminbi (China Yuan). Perhaps also solidifying the idea of using the reserve as part of the backbone for a potential BRICS ‘Unit’ currency if and when that day ever arrives. Gold closed at nearly 2633.00 USD per ounce before going into this weekend.

1. Trump Effect: WTI Crude Oil is around 66.78 USD as the promise of easier energy production for U.S companies has created the conviction of steady and less expensive supply. The USD remains in the stronger elements of its long-term Forex range, and folks betting against the strength of the USD need to remain cautious. BRICS has been warned about not infringing on the USD by Donald Trump, and some member nations of the organization have affirmed they do not seek a BRICS currency (yet). Tariffs have been threatened, but China has responded by showing it has the ability to create potential hinderances this week via a tough negotiation stance by threatening to stop export of rare earth metals to the U.S. Mexico and Canada have felt the verbal wrath of the President-elect already and started to react. All of this while Donald Trump still has six full weeks before taking power.

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MSTR fell from 400.00 USD yesterday to the 350.00 level.

by with No Comment AMT MarketsAssetsFeatured Highlights

MSTR fell from 400.00 USD yesterday to the 350.00 level.

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MicroStrategy One Month Chart as of 27th November 2024

MicroStrategy went from above 400.00 USD yesterday to the 350.00 level. MSTR is a Bitcoin proxy and speculative. Michael Saylor, the Chairman of MSTR, takes many risks as its leader and appears to have a lot of decision making power when it comes to the company’s corporate treasury purse strings.

MicroStrategy if pursued by retail traders as a CFD or held as a equity in a portfolio needs to be treated as a speculative asset that is highly volatile. Technically MicroStrategy has seen its value correlate to Bitcoin in a well defined manner over the past handful of years. Per current accounting MSTR holds over 386,000 Bitcoin, this per MicroStrategy’s own reporting and publication of a Form 8-K via the SEC.

Its corporate governance has essentially allowed MSTR to become a company that while listed as a data provider including business intelligence, mobile software and cloud based services for users is for all intensive purposes now ‘married’ to Bitcoin as a main driver for its value. MSTR is traded on Nasdaq and the Russell 1000. The company is based in Virginia, USA.

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AMT Top Ten Miscellaneous Items on the 21st September 2024

by with No Comment AssetsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Items on the 21st September 2024

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10. Shohei Ohtani: The slugger hit another home run last night bringing his total to 52 for the season. There is more than a week of regular season action remaining. Incredibly, if Ohtani pitches next season while also hitting, his current statistics could be outshined. The Dodgers pitching staff is in tatters as the MLB playoffs approach, and it has been opined that Ohtani could pitch in the postseason. However, this option is highly unlikely. Ohtani is an outstanding athlete and has surpassed many expectations.

9. Beep, Beep: The purchasing of technology, including their production and logistics sources are likely coming into question in many diverse places around the globe. The detonation of pagers and walkie talkies used by the terrorist group Hezbollah which is largely based in Lebanon has certainly created panic about vulnerabilities. Contemplation in many nations regarding the buying of equipment that could be prone to spyware and other harmful acts is a reality.

8. Michael J. Saylor: MicroStrategy led by its Executive Chairman has added to their Bitcoin holdings. MicroStrategy is reported to have around 252,220 Bitcoins. The current value of BTC/USD is around 63,000 as of this writing. Part of Saylor’s love for Bitcoin rests in his belief that value is due to scarcity, and secure durability as a store of value technologically. However, each Bitcoin holds 100 million Satoshis, the units each Bitcoin is divided by digitally as source code. Even if conservatively there are only 15 million Bitcoin in circulation in ten years time, 15 million times 100 million is 1.5e + 15, meaning more than a quadrillion Satoshis in circulation. That is not scarcity, particularly when quantum computers could create lightning quick digital trading via coding sources. The premise and concern for a major devaluation in Bitcoin is legitimate. Do you disagree?

7: Equity: Intel has apparently been made a sales offer by Qualcomm. Intel’s market cap is 93.19 billion USD, and Qualcomm’s is 188.18 billion USD. The biggest shareholders of Intel are Vanguard, Blackrock and State Street, interestingly enough Qualcomm’s three biggest shareholders are identical. So if the largest shareholders are practically alike, it comes down to a management question, can Qualcomm run Intel better?

6. Closer: The U.S election will be in a little over six weeks times. The race for the White House according to many polls is very close and the outcome will depend on important swing States. There is still enough time for Harris and Trump to pick up votes, but also enough time for each to unwittingly make an error which can cost votes. Not only is the White House up for grabs, but the House and Senate are at stake too for the Democrats and Republicans.

5. Europe’s ability to put on blinders as the Ukraine and Russia battle in a not so distant land, and bickering between E.U nations while finding no solutions for the conflict have many historical comparisons within the continent. The ability to look the other way as chaos grows and inflicts harm on neighbors has a long tradition in Europe. Since the Middle Ages into the present Europe has a significant track record of negotiating harmony and procuring tenuous treaties, which eventually lead to additional discord.

4. USD/JPY: The currency pair closed at nearly 143.850 yesterday. Analysts are trying to create narratives regarding the climb higher the past handful of days, this after the USD/JPY touched the 139.600 level approximately last Monday. Here’s the thing: financial institutions that trade the Japanese Yen had positioned for a more dovish Federal Reserve and more hawkish BoJ. The Fed delivered their end of the bargain on Wednesday, confirming actions which had already been factored into the currency pair. The USD/JPY ‘correction’ higher is within equilibrium that financial institutions have to recalibrate as they make their new mid-term outlooks and decide how to shift their cash forward positions incrementally. The move higher has not been massive and is a natural reaction as large players rearrange their commercial paper. Incremental is the key word.

3. Energy Calm: WTI Crude Oil and Brent Oil continue to trade slightly above their lower price realms, which saw long-term values in the second week of September tested. Current ratios are still flirting with technical considerations seen in the late spring of 2023. While hyperbole is communicated far and wide regarding potential Black Swan events in the Middle East which could cause Crude Oil to increase rapidly, the energy resources remain rather tranquil and seemingly transfixed on concerns about mid-term demand globally due to recessionary pressures.

2. All-Time Highs: Gold created new record values going into this weekend near 2,622.00. In September of 2022, gold was trading near 1,600.00 USD per ounce. The move higher in the precious metal has come on the heels of global inflation. Some also correctly point to a distrust of global central banks and fiscal concerns regarding the world’s largest economies. The bullish run upwards in gold has been significant and the commodity will remain an important store of value for investors. Speculatively, some short and mid-term traders are wondering about gold’s ability to maintain a trajectory skywards and if sideways price action and possible downturns will ensue for a while. Long-term investors remain serene.

1. Applause: The Federal Reserve issued an aggressive interest rate cut of 0.50%. The Fed seemingly is acting as if they are trying to please financial institutions because of past incompetence. The U.S central bank now needs economic data to behave according to their prescribed outlooks. What could go wrong? Another Federal Funds Rate cut is likely in November, after that a lot will depend on behavioral sentiment and data which may be affected by as of yet unknown leadership from the White House starting in early 2025. Fed Chairman Jerome Powell sounded almost too optimistic about the U.S economy during his Press Conference this past Wednesday. The U.S Final GDP numbers coming this Thursday will prove interesting, the growth numbers carry an expected gain of 2.9%.

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Horror Show to Come for Bitcoin and MicroStrategy?

by with No Comment Cryptocurrencies & Digital Assets

Horror Show to Come for Bitcoin and MicroStrategy?

How cruel do hedge funds want to be? Actually it isn’t about being cruel, it is about making money. And hedge funds have an opportunity they could be pursuing which will affect Bitcoin and MicroStrategy.

Bitcoin is traversing slightly above the 19,581.00 as of this writing. Michael Saylor, the CEO of MicroStrategy, announced a couple of days ago his company has bought 480 additional Bitcoin near an average price of 21,817.00.

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MicroStrategy is selling for around 164.30 via its listing on NASDAQ as of this morning. Because MicroStrategy holds 129,699 Bitcoin as of the 28th of June, the price of the company is certainly feeling the pressure of the bearish trend in Bitcoin. There is a direct correlation.

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Now how can you take advantage of that? Well you may not be able to as an individual, unless you have plenty of money to wager on a massive speculation. However, hedge funds do have huge amounts of money to bet, and they potentially could be setting the table for a ‘bloodletting’ in Bitcoin and MicroStrategy which could equate into a massive payday for the hedge funds.

Let’s say some analyst for one of the hedge funds who is quantifying numbers as part of their job, and is looking for potential weaknesses in the current world of financial affairs takes a long look at Bitcoin and MicroStrategy and smells an opportunity. Let’s for a moment, consider the possibility that if the hedge fund believes Bitcoin can sink further and wants to short the digital asset it might be a good idea. Combine that with the notion that MicroStrategy is under pressure and could lose additional value if Bitcoin falls in price. This would set the table for a hedge fund to short both Bitcoin and MircoStrategy.

A combined short on BTC/USD and MicroStrategy is a potential huge payoff. The ability of knowing exact short positions on Bitcoin, also correlates into projections regarding MicroStrategy’s outlook. It is the equivalent of a daily double horse racing strategy.

Considering that the market capitalization of Bitcoin is around 373.6 billion USD at this moment around a price of 19,581.00 per coin, this is not a massive amount of money if a handful of hedge funds were to combine in the endeavor of seeking erosion of value in Bitcoin and MicroStrategy.

A reduction in price of Bitcoin also will likely lead to more capitulation among ancillary businesses related to the digital asset. There is a definite fear of contagion among decentralized finance enterprises and some are wobbling already, expect more carnage.

There are no guarantees in trading. Risk is aplenty. However, hedge funds can create much more force in the market and a combination of efforts to seek havoc is actually a healthy part of the marketplace. Hedge funds are able to take risks because they have a better ability to absorb pain for longer periods of time than a mere speculator.

Hedge funds seek weaknesses and strengths and take advantage of errors in the system. Bitcoin and MircroStrategy are vulnerable and together they could sink further.

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BTC/USD: Bitcoin Remains near Troubling Support Levels

by with No Comment Cryptocurrencies & Digital Assets

BTC/USD: Bitcoin Remains near Troubling Support Levels

The price of Bitcoin continues to create perilous adventures for short term speculators as it moves below 30,000.00, while threatening to flirt with even lower values.

BTC/USD is trading a couple of hundred dollars above the 29,000.00 realm as of this morning. After being able to consolidate and provide speculators with a more tranquil environment last week, Friday’s price action saw the 28,800.00 juncture challenged, this as the NASDAQ Composite also suffered a red slash of selling. However, as Friday came to a close Bitcoin recovered some of its value, along with the major indices. Yet, BTC/USD certainly did not create a sudden change of opinion among most traders. Its bearish trend remains the flavor of the month.

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This weekend has seen consolidation, but the past day has also brought an incremental decline again into Bitcoin’s trading landscape. This is not your grandparent’s speculative haven, BTC/USD trades all day and every day, there are no vacations. While this allows short term wagers for folks who need to feel the thrill of price action at all times, it also allows the same people to watch their money evaporate into thin air just like at a Las Vegas casino.

As BTC/USD hovers dangerously close to the 29,290.00 vicinity this morning, traders who lean towards technical perspectives and have long positions will likely not want to see Bitcoin break below the 29,000.00 price. Weekend trading for Bitcoin over the past handful of months, and for most of the major cryptocurrencies, has been a battlefield which has witnessed some of the strongest selling action during this long bearish trend which began in earnest November of 2021.

If the 28,800.00 price range were to begin having its values tested once again, this would not be a welcome sight for short term bullish folks who simply refuse to be short sellers. Long term holders of Bitcoin might relish what they consider lower prices and exclaim the digital asset needs to be bought. Folks like Michael Saylor may see current prices as a buying opportunity for his corporate treasury at MicroStrategy, but losses are mounting for many people and if Bitcoin continues to struggle the question arises if long term believers of Bitcoin may have to capitulate to create cash flow that has suddenly been hurt.

Short term traders need to contemplate the trend and the dangers that Bitcoin poses. Folks who decide to use leverage and are looking for dramatic price changes need to be braced for bad outcomes if the direction of Bitcoin goes against their wager. The choice of the word ‘wager is not a mistake, Bitcoin is a betting environment for day traders – simple as that. Yes, the right direction may be chosen periodically, but trading BTC/USD is not an endeavor which should be treated without careful consideration.