Saylor's Speculative Attack - WiM Weekly
A weekly rundown of new WiM podcast releases and some food for thought
Microstrategy has acquired an additional 11,931 BTC for ~$786.0M using proceeds from convertible notes & excess cash for ~$65,883 per bitcoin. As of 6/20/24, MSTR 0.00%↑ hodls 226,331 BTC acquired for ~8.33B at an average price of $36,798 per bitcoin.
Michael Saylor and his team have turned Bitcoin’s volatility and global capital markets into a seemingly perpetual pump machine for Microstrategy’s share price. How does Saylor manage to borrow practically a billion dollars at near 0% interest? The answer lies in convertible notes, which are debt instruments that that holders can choose to convert into equity. Buyers of these notes share in the potential upside of MSTR's stock while maintaining downside protection. The high implied volatility of Bitcoin, and by extension MSTR’s stock, drives demand for these convertible notes due to the profit potential from future price speculation. Saylor can simply keep issuing these notes at strike prices above MSTR’s current share price, and use the proceeds to buy more Bitcoin. Wash, rinse, repeat, and watch the price pump.
MSTR’s Bitcoin strategy is effectively a “speculative attack” on fiat currencies. By borrowing USD, swapping USD for BTC, then holding the BTC as a treasury reserve asset, MSTR increases the implied volatility of its stock, which leads to more speculative demand for MSTR, which increases its stock price, which strengthens MSTR’s borrowing capacity, allowing it to borrow more USD to buy even more BTC. By simply following the straightforward economic incentives of “borrow and spend assets that go down in value to buy and hold assets that go up in value,” Michael Saylor’s Microstrategy is executing a highly lucrative macrostrategy.
Saylor and Microstrategy have the intelligence and the conviction to pull this off because they’ve done the work necessary to understand the nature of money. Other public companies are taking notice, and it is only a matter of time before many more follow suit. This is why I can’t repeat it enough: “What is Money?” continues to be the defining question of our time in history. If you don’t understand how the game is being played, then you probably are the game being played.
This Week:
WiM481 with Mark Kreitzman
“The Ledger customer list is still sitting on the dark web in [at least] 6 different locations. T-Mobile has been hacked 3 times in the last 5 years…They always say, “oh we got this under control, you don’t have to worry about it.” They want people to forget about it so that 9 months down the road, when people start having loans taken out in their name or their identities stolen, they can’t link it back to whatever system got breached…The only way to prevent a SIM swap is as part of a network solution, which is what Efani does.”—Mark Kreitzman
I had my phone SIM-Swapped last summer while working in Europe. Although I didn’t lose access to any of my accounts (since I don’t use SMS 2FA), I still had to spend ~2 days communicating with carrier customer support trying to get my phone service back. It was a real pain, but thankfully services like Efani prevent anything like that from happening ever again. You can protect your mobile phone from SIM swap attacks with Efani (discount is auto-applied when using this link): https://www.efani.com/breedlove
Link to full episode: SIM Swap Attacks: Protect Your Data and Identity with Mark Kreitzman (WiM481)
WiM482 with Harris Irfan
“The most Islamic form of money has already been invented…The key is low time preference. Muslims and Christians are low time preference people. Their mindset is one in which they store good deeds in this life for the hereafter…We [have] faith and belief that there will be a day of reckoning [in] which we’ll [be rewarded]. And it just so happens, that Bitcoin, by its nature, is low time preference.”—Harris Irfan
Link to full episode: The Islamic Case for Bitcoin with Harris Irfan (WiM482)
WiM483 with Tom Bilyeu
“The [crucial] mistake that entrepreneurs [and leaders] make is that they lack clarity…I would posit that [true] leadership is the ability to get a lot of people moving in the same direction for their own selfish reasons…The people that I’m leading — I need to first be solving a problem for them…I have to lead people, in their best interest, to a place they don’t even know they want to go to. I have to identify what’s going to be a good outcome for them. I have to then articulate that to them, and then I need to be able to lead them there. Then, when they get there, it needs to actually have been the thing that was good for them all along. ”—Tom Bilyeu
The full episode with Tom Bilyeu will go live today (6/21/24) at 3:00pm EST.
We’ve relaunched the Clips Channel! Subscribe for highlights from episodes and other exclusive content:
Upcoming Episodes:
6/24 with Christos Palios
Christos Palios is an award-winning fine art photographer and artist.
6/26 with Aleksandar Svetski (The Bushido of Bitcoin)
Aleksandar Svetski is an author and entrepreneur with a focus on technology, economics, history, and Bitcoin.
6/28 Nico Moran of “Simply Bitcoin” interviews me
Nico Moran is the host of “Simply Bitcoin”, a daily Bitcoin show that keeps you up-to-date with the peaceful Bitcoin revolution.
Events on the Horizon:
Bitcoin 2024: The World’s Largest Bitcoin Conference (use discount code BREEDLOVE): https://b.tc/conference
Pacific Bitcoin 2024: https://www.pacificbitcoin.com/
Sponsors:
In Wolf's Clothing: https://wolfnyc.com/
Heart and Soil Supplements (discount code BREEDLOVE): https://heartandsoil.co/
Anthony DiClementi's Biohacking Secrets (Text BREEDLOVE to 847-943-7221)
Swan Bitcoin: https://www.swanbitcoin.com/breedlove22/
The Farm at Okefenokee: https://okefarm.com/
Products I Endorse:
EFANI: Protect your mobile phone from SIM swap attacks: https://www.efani.com/breedlove
Noble Protein (discount code BREEDLOVE for 15% off): https://nobleorigins.com/