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MicroStrategy Doubles Down On Bitcoin, What You Need To Know

Bitcoin investments

The post MicroStrategy Doubles Down On Bitcoin, What You Need To Know appeared first on Coinpedia – Fintech & Cryptocurreny News Media| Crypto Guide

MicroStrategy has raised $650 million and initiated to purchase more amount of Bitcoins making the exposure to bitcoin to $1.1 billion. This increase in capital a d wise decisions for investment brought a visible change in the risk profile of the company shares. So it is the best time for diligent investors to redefine their …

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MicroStrategy has raised $650 million and initiated to purchase more amount of Bitcoins making the exposure to bitcoin to $1.1 billion. This increase in capital a d wise decisions for investment brought a visible change in the risk profile of the company shares. So it is the best time for diligent investors to redefine their position accordingly and get ready to accept the more aggressive risk/reward.

MicroStrategy’s introduced an unusual treasury policy consisted of buying $425 million worth of bitcoin. And after some days of this policy announcement, MicroStrategy CEO Michael Saylor 

In the days following the policy announcement, MicroStrategy CEO Michael Saylor who initially treated it as a “reckless bet” narrative, later on, complemented it to be a sage and well-structured decision motivated by several macroeconomic factors.

Viewing the company’s balance sheet, business operations, and prospects, it could be concluded that this strategic decision made perfect sense depending on a risk/reward system. Visit https://bitqs.app/ to know more about this.

Source of Capital Matters

The difference to be noted between the first and second purchase is visible in the capital funding source. It paid for the first $425 million purchase with cash straight from the balance sheet. Michael Saylor wisely analyzed the macroeconomic factors on various occasions which were perfectly beneficial foreseeing the inflation and alternatives lack.

This new episode of purchase is being funded by a large capital raise, offering 0.750% Convertible Senior Notes due in 2025. This would bring a potential change in the capital structure of the company. It could be said that this company was impressed by  the investment thesis of the first bitcoin investment.

Although recently Bitcoin is considered to be the best option for being an inflation hedge, still there is no guarantee that this correlation will hold. It is a fact that if any of the inflation hedges are not pre-programmed like inflation-linked bonds, they keep on holding the position of being dummy inflation hedges only after a long history of existence .

Bitcoin could not be said to be the most trustworthy inflation hedge as its history is still too short. We can also hope that the renewed investment in bitcoin would hold a different nature than the first, separating its ways away from the macroeconomic motivation towards a more active, speculative investment.

Some people side the view that losers Some traders say that losers rule over losers and winners rule over winners. Seeing this verdict in MicroStrategy’s first investment which is up more than 80%, an aggressive averaging up seems to be the right choice.

If we observe the MicroStrategy stepping in to invest in Bitcoin, we understand that it is a far better decision to invest in Bitcoin as compared to merely hold pure bitcoin. This also cast a positive impact on the stock.

Updated Scenario Analysis

According to a recent analysis, the company is now stuck with $650 million in debt and only $50 million per year in cash from operations. It also has notes due in 2025. Though it would have plenty of time to accumulate enough cash to repay the notes. But it is all time faced with a lurking fear of the heavy reputational risk on the company. It also ended in putting more pressure on its ability to raise money, and also on attracting and retaining core business customers.

Can we predict Bitcoin’s price to reach $100,000? The stock would appreciate far more than the $560. It is high time to encourage the company to take on new money. Initially, the conversion rate for the notes is 2.5126 shares of MicroStrategy class A common stock per $1,000  which is only the principal amount of notes.

This is also to an initial conversion price of approximately $397.99 per share. It shows a premium of approximately 37.5% over the last reported sale price of $289.45 per share of MicroStrategy class A common stock on The Nasdaq Global Select Market on December 8, 2020.”

In the second episode of the investment, Bitcoins price is also high at $18000. It is better to analyze this decision, from the point of view of MicroStrategy and its CEO Michael Saylor. 

Takeaway

This new capital structure makes the whole process of investment in MicroStrategy much more similar to a pure bitcoin investment. This investment has also lost its peculiar specialty as a low-risk exposure to bitcoin. The company is over-exposed to bitcoin. It is a good thing but in the long run, it puts the company at the risk of bringing bitcoin’s price to $0.

Source: https://coinpedia.org/guest-post/microstrategy-doubles-down-on-bitcoin/

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BitMEX Executives to Face Trial in March 2022

BitMEX’s former executives Arthur Hayes, Benjamin Delo, and Samuel Reed will face trial in March 28th, 2022.

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The executives of the derivatives trading platform – BitMEX – will face trial in March next year. The money laundering case will come 18 months after charges were first filed. The former members of BitMEX can face up to 5 years in prison and a $250,000 fine if found guilty.

The Trio Heads to Trial

Last year, US officials accused the CEO of the company Arthur Hayes, the co-founder Benjamin Delo, and the chief technology officer Samuel Reed of violating the Bank Secrecy Act. Moreover, the members of BitMEX were served with money-laundering charges.

On May 11th – 18 months after the first accusations against them – New York District Judge John Koeltl set the trial date for March 28th, 2022. Furthermore, Gregory Dwyer – BitMEX’s head of business development – also faces charges but will appear in court separately.

Even though the company’s headquarters are in the Seychelles, the US Department of Justice accused BitMEX of failing to apply anti-money laundering procedures while doing business with US-based customers.

Interestingly enough, the ex-CEO of BitMEX – Arthur Hayes – said that the exotic island was a more convenient place for business as it was much easier to bribe Seychelles’ authorities rather than the US ones. The former executives of the cryptocurrency exchange could face a maximum of five years in prison and a $250,000 fine.


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Where Was Arthur Hayes?

Attorney Jessica Greenwood told the court that Hayes has ”discussed a surrender date of April 6th, 2021 in Hawaii.” She added that ”the plan is to notify the Court in advance of that appearance and discuss logistics” around his submission.

As CryptoPotato reported, even after his remote announcement Hayes continued to reside abroad and explained that he would only visit the United States whenever has to face the trial in New York.

In the end, the former BitMEX CEO indeed turned himself in on April 6th, 2021. However, the officials released him on a $10 million bond pending the future court process.

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Source: https://cryptopotato.com/bitmex-executives-to-face-trial-in-march-2022/

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dotmoovs Raises $840,000 From Strategic Investors and Partners

[Press Release – Tallinn, Estonia, 12th May, 2021] dotmoovs, an NFT platform powered by advanced computer vision algorithms has successfully completed a private funding round of $840,000 from notable investors. Amongst the investors are Moonrock Capital, Morningstar Ventures, Spark Digital Capital, Ascensive Assets, Rarestone, Building Blocks, MarketAcross, AU21 and GBV Capital. The sports industry needs […]

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[Press Release – Tallinn, Estonia, 12th May, 2021]

dotmoovs, an NFT platform powered by advanced computer vision algorithms has successfully completed a private funding round of $840,000 from notable investors. Amongst the investors are Moonrock Capital, Morningstar Ventures, Spark Digital Capital, Ascensive Assets, Rarestone, Building Blocks, MarketAcross, AU21 and GBV Capital.

The sports industry needs a solution for giving everyone a real chance to earn from their skills. dotmoovs is designed to bridge the gap between physical and geographic limitations, assessment of skill and finally – monetisation. Our vision is to build a powerful sports platform where everyone can challenge their friends or any other similar skilled players in the World for a challenge in their favourite sport.

“We are proud to have such notable investors joining us in building the first crypto mobile worldwide sports competitive environment. We know they can boost our growth and provide industry specific insight and knowledge which will be a deciding factor for us” said Ricardo Martins Costa, head of growth of dotmoovs.

“Our vision is a robust platform powered by blockchain and a state-of-the-art AI system that can analyse videos of players performing sports challenges in real-time” Ricardo adds.

“Moonrock Capital and Morningstar Ventures have come together to assist in incubating and bringing the dotmoovs project together. We are grateful and honored by the trust shown by dotmoovs’ team to become their official incubators and lead investors. Working closely with the team for some time now, we are highly impressed with their professionalism, expertise, and what they’ve developed so far. We are very excited to see this ambitious and revolutionary project come to life – combining sports, blockchain, and NFTs with dotmoovs’ vision of growth. The level of their supporting technology is not something we see every day. For these reasons, we are thrilled to be a part of dotmoovs’ journey and helping them achieve their vision.” said Simon Dedic, Managing Partner Moonrock Capital, and Danilo Carlucci, CIO Morningstar Ventures.

About dotmoovs

dotmoovs is the first crypto mobile worldwide competitive environment. The platforms allow users to compete with others around the world just by bringing their skills, ambition, and smartphone. dotmoov’s AI-based video referee will assess their performance in real-time. Powered by blockchain technology, sport competition will enable fair challenges and access to unique digital assets.

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Source: https://cryptopotato.com/dotmoovs-raises-840000-from-strategic-investors-and-partners/

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Bitcoin Has a Long Way to Go Says Bain Capital’s Chairman

The Chairman of the investment firm Bain Capital believes that BTC is far away from being a viable currency but it could be better than gold.

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Steve Pagliuca – Chairman of Bain Capital – opined that Bitcoin is hard to be seen as a viable currency yet. According to him, the stability of the primary cryptocurrency is not satisfactory and it has a long way to go to be accepted in lots of places.

Additionally, Pagliuca commented on arguably the hottest trend in the crypto space lately – Dogecoin – as he called it a ”prescription for a disaster.”

BTC Is Not a Viable Currency

Steve Pagliuca shared his thoughts on Bitcoin in a recent Bloomberg interview. Bain Capital’s Chairman outlined the potential of the digital asset but alarmed that it is hard to be seen as a viable currency at the moment and is far from receiving mass adoption.

”It’s hard for me to wrap my mind around bitcoin being a viable currency. Bitcoin is going to have to go a long way to go to be accepted in lots of places.”

However, Pagliuca made an interesting comparison between the primary cryptocurrency and gold. In his opinion, the digital asset is actually more efficient than the precious metal as it can be used as a value transferring instrument. Pagliuca opined that when people criticize BTC they should criticize gold too as the value of the yellow metal is based on what people think about it.

The Chairman of Bain Capital surmised that the blockchain technology is ”fantastic” but he also alerted that if BTC keeps its massive invasion eventually it can threaten the stability of the global financial system.


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Steve Pagliuca. Source: Bloomberg
Steve Pagliuca. Source: Bloomberg

DOGE Could Be a Disaster

The crypto community and numerous outsiders have been focused on Dogecoin lately, resulting in a spectacular price surge for the meme token. As such, Pagliuca was also asked about it.

Despite the support and sympathy which Elon Musk and Mark Cuban have shown for the meme coin, Pagliuca shared a highly unfavorable opinion about it:

”Dogecoin seems like a prescription for a disaster. I am the last person who wants to call it valuable. It could be fun to buy DOGE but I wouldn’t bet my savings on it.”

Is Bitcoin Really Similar to Gold?

Steve Pagliuca is not the first prominent name to compare the primary cryptocurrency with the precious metal. The American entrepreneur and billionaire – Mark Cuban – opined on the topic, too.

During a recent interview, Cuban noted that the digital asset together with gold are ”financial religions.” However, he went further by saying that Bitcoin is the better option as it ”enables the transfer of value locally and globally.”

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