MicroStrategy’s Aggressive Bitcoin Policy – A Danger to the US Dollar?

MicroStrategy has no holding back. The company wants to invest another $ 1 billion worth of Bitcoin in Bitcoin and is borrowing money again for this.

How far can Michael Saylor go?

He’s done it again. Last Wednesday, February 17th, we received the news that MicroStrategy, under the leadership of its charismatic CEO Michael Saylor, will again invest in Bitcoin. After the company had already started to exchange its cash reserves for Bitcoin in the summer of 2020, the latest motto is: buy on credit.

In December last year, for example, the company began issuing bonds, known as senior convertible notes . According to the prospectus, the proceeds from the prescriptions should flow into BTC in order to further increase the position.

Anyone who thought that the The News Spy management team would be satisfied with that was wrong. As a press release shows, the first issue of the Notes with a volume of 400 million US dollars (USD) was still comparatively low. In the latest securities issue, the company has a funding target of $ 1 billion .

The most piquant detail, however, is the interest on the paper. This is because it is zero.

Dollar swan song

It has to be said very clearly: What Michael Saylor is doing here is an orchestrated attack on the US dollar as a world reserve currency. Because of the loose monetary policy that the central banks have been applying since March 2020 with a view to the COVID pandemic, fiat money is currently available for free. And the business intelligence company, which behaves like a kind of leveraged Bitcoin hedge fund on the stock market, takes advantage of this.

For example, the base money supply of the US dollar has almost doubled since the beginning of the pandemic, as can be seen in the following graphic.

The consequence of this unprecedented flood of liquidity is, among other things, low interest rates. Ten-year German government bonds currently have an interest rate of -0.34 percent. What was unthinkable years ago is reality today: Those who lend money are not rewarded for foregoing liquidity, but are guaranteed to receive less in return.

With that in mind, the zero-yielding MicroStrategys Senior Notes is almost a good deal. The bottom line is that Saylor is doing everything possible to remove the US dollar from his books.

It is obvious that companies should convert US dollars that are guaranteed to decline in value for something that is guaranteed to increase in value,

Michael Saylor

Crypto market downturn forces nearly $2 billion

Brutal decline: crypto market downturn forces nearly $2 billion in liquidations

Crypto market downturn forces $2 billion in liquidations

  • Crypto traders lost nearly $1.9 billion in liquidations today.
  • Bitcoin saw a new all-time high but was rejected soon after.
  • The cryptocurrency’s market capitalisation saw a $1 billion drop from its respective all-time high.

After Bitcoin climbed to a new all-time high just below $50,000 on 14 February, a sharp correction caused problems for many optimistic crypto traders.

According to CoinGecko data, Bitcoin hit another new all-time high of $49,531 in the late hours of 14 February. With the magic $50,000 milestone closer than ever, crypto traders by Bitcoin Champion took heavy long positions.

However, the market had other plans. When Bitcoin (Go to Buy Bitcoin at eToro guide) fell back to a local low of below $46,000 in the early hours of February 15, the total crypto market capitalisation was adjusted by $1 billion.

This downturn led to many over-leveraged long positions being unwound. Data from Bybt shows that $1.89 billion in losses occurred in the last 24 hours.

Cryptocurrency liquidations data from Bybt

Bitcoin and Ethereum accounted for the majority of liquidations as usual, totalling over $9 million between the two.

It also appears that Ripple’s XRP caught traders off guard. Ripple’s XRP had been steadily climbing back up after the token lost 50% following the announcement of an SEC lawsuit against Ripple Labs. Traders lost nearly $100 million betting on another revival.

Other notable losses include EOS, Litecoin (LTC) and Cardano (ADA), all of which have recently risen to multi-year highs. Each saw more than $50 million in liquidated losses.

This marks the third highest level for liquidations since early 2021. On 10 January, long traders were squeezed for $2.5 billion after Bitcoin fell from $41,000 to $30,000.

This was also the same day Ethereum fell back to $900 from an all-time high of $1,350 at the time.

It seems that the bleeding has stopped for now. Currently (time of this writing) Bitcoin had recovered slightly and is now trading back at $47,500.