Crypto-trading thread

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FobTies
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In reply to PA24 • 2:40a, 1/30/25
PA24 said:
@NFLPlayerProps said:
FobTies said:
@NFLPlayerProps said:
Quote:
Peers might be other miners or equities with biz models that make them proxies for bitcoin. I think MSTR D/E is 1.3 recently.
MSTR's current debt to equity ratio is about 0.13. You missed by 1,000%


You sure about that?

Go to financials > ratios then report back to us what you found.

https://stockanalysis.com/stocks/mstr/financials/ratios/

At the time I posted, MSTR owned about $48.4B of BTC compared to just $6.2B of debt.

Reading their financial statements doesn't tell the entire story because they haven't yet adopted the new FASB accounting standards for bitcoin, in all their reporting to date it was still classified as an intangible asset. So they had to report the value of their bitcoin at cost less impairment, meaning the bitcoin's value had to be reported at the lowest price it has reached since they purchased it instead of its actual current value. So, for example, all of the bitcoin they bought between August 2020 and November 2022 had to be valued at the bear market low of $16k each instead of $100k+

New FASB standards instruct companies to measure bitcoin at fair value each quarter. February 5th will be MSTR's first earnings report that incorporates these new rules.
If that is truly the case, this stock would explode on or before Feb 5th?


It's was the low of the reporting period, not the lowest MSTR ever bought BTC back in 2020, that will change to "fair value" aka current value at time of report.

The accounting change isnt going to make the company any more valuable, BTC trading higher will.
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@NFLPlayerProps
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In reply to FobTies • 7:13a, 1/30/25
FobTies said:
PA24 said:
@NFLPlayerProps said:
FobTies said:
@NFLPlayerProps said:
Quote:
Peers might be other miners or equities with biz models that make them proxies for bitcoin. I think MSTR D/E is 1.3 recently.
MSTR's current debt to equity ratio is about 0.13. You missed by 1,000%


You sure about that?

Go to financials > ratios then report back to us what you found.

https://stockanalysis.com/stocks/mstr/financials/ratios/

At the time I posted, MSTR owned about $48.4B of BTC compared to just $6.2B of debt.

Reading their financial statements doesn't tell the entire story because they haven't yet adopted the new FASB accounting standards for bitcoin, in all their reporting to date it was still classified as an intangible asset. So they had to report the value of their bitcoin at cost less impairment, meaning the bitcoin's value had to be reported at the lowest price it has reached since they purchased it instead of its actual current value. So, for example, all of the bitcoin they bought between August 2020 and November 2022 had to be valued at the bear market low of $16k each instead of $100k+

New FASB standards instruct companies to measure bitcoin at fair value each quarter. February 5th will be MSTR's first earnings report that incorporates these new rules.
If that is truly the case, this stock would explode on or before Feb 5th?


It's was the low of the reporting period, not the lowest MSTR ever bought BTC back in 2020, that will change to "fair value" aka current value at time of report.

The accounting change isnt going to make the company any more valuable, BTC trading higher will.
If that is the case, then explain how Tesla reported the value of their bitcoin at $184M for four straight quarters, and then reported it at $1.08B yesterday.
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@NFLPlayerProps
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In reply to PA24 • 8:01a, 1/30/25
PA24 said:
PA24 said:
@NFLPlayerProps said:
FobTies said:
@NFLPlayerProps said:
Quote:
Peers might be other miners or equities with biz models that make them proxies for bitcoin. I think MSTR D/E is 1.3 recently.
MSTR's current debt to equity ratio is about 0.13. You missed by 1,000%


You sure about that?

Go to financials > ratios then report back to us what you found.

https://stockanalysis.com/stocks/mstr/financials/ratios/

At the time I posted, MSTR owned about $48.4B of BTC compared to just $6.2B of debt.

Reading their financial statements doesn't tell the entire story because they haven't yet adopted the new FASB accounting standards for bitcoin, in all their reporting to date it was still classified as an intangible asset. So they had to report the value of their bitcoin at cost less impairment, meaning the bitcoin's value had to be reported at the lowest price it has reached since they purchased it instead of its actual current value. So, for example, all of the bitcoin they bought between August 2020 and November 2022 had to be valued at the bear market low of $16k each instead of $100k+

New FASB standards instruct companies to measure bitcoin at fair value each quarter. February 5th will be MSTR's first earnings report that incorporates these new rules.
If that is truly the case, this stock would explode on or before Feb 5th?

$100K/16K is 6.25x
$48B/$3B= 16x

If all thinks equal, they will report 6.25 x 3.08 = $19.25B not $48.4B,

Where did you come up with $48B per your post above?
They own 471,000 bitcoin. I multiplied that amount by the USD price to determine its current value.
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will25u
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1:36p, 1/30/25
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Heineken-Ashi
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2:33p, 1/30/25
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Yukon Cornelius
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In reply to Heineken-Ashi • 2:45p, 1/30/25
AG
So how many people have been on Forbes like he described? Just the ftx guy and now Saylor? Not a very large data set lol
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Heineken-Ashi
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In reply to Yukon Cornelius • 4:14p, 1/30/25
Yukon Cornelius said:
So how many people have been on Forbes like he described? Just the ftx guy and now Saylor? Not a very large data set lol
No idea. Didn't verify any of it either. Could be complete **** for all I know.
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carl spacklers hat
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In reply to Yukon Cornelius • 6:32p, 1/30/25
Yukon Cornelius said:
So how many people have been on Forbes like he described? Just the ftx guy and now Saylor? Not a very large data set lol
That was my exact reaction, too. I think the tweeter has an ax to grind. Someone should ask him to show his BTC short positions.


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Brother Shamus
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In reply to Heineken-Ashi • 6:54p, 1/30/25
These datapoints mean absolutely nothing.
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Yukon Cornelius
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In reply to carl spacklers hat • 7:50p, 1/30/25
AG
Someone panic sold the deepseek fear
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FobTies
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In reply to @NFLPlayerProps • 8:58p, 1/30/25
@NFLPlayerProps said:
FobTies said:
PA24 said:
@NFLPlayerProps said:
FobTies said:
@NFLPlayerProps said:
Quote:
Peers might be other miners or equities with biz models that make them proxies for bitcoin. I think MSTR D/E is 1.3 recently.
MSTR's current debt to equity ratio is about 0.13. You missed by 1,000%


You sure about that?

Go to financials > ratios then report back to us what you found.

https://stockanalysis.com/stocks/mstr/financials/ratios/

At the time I posted, MSTR owned about $48.4B of BTC compared to just $6.2B of debt.

Reading their financial statements doesn't tell the entire story because they haven't yet adopted the new FASB accounting standards for bitcoin, in all their reporting to date it was still classified as an intangible asset. So they had to report the value of their bitcoin at cost less impairment, meaning the bitcoin's value had to be reported at the lowest price it has reached since they purchased it instead of its actual current value. So, for example, all of the bitcoin they bought between August 2020 and November 2022 had to be valued at the bear market low of $16k each instead of $100k+

New FASB standards instruct companies to measure bitcoin at fair value each quarter. February 5th will be MSTR's first earnings report that incorporates these new rules.
If that is truly the case, this stock would explode on or before Feb 5th?


It's was the low of the reporting period, not the lowest MSTR ever bought BTC back in 2020, that will change to "fair value" aka current value at time of report.

The accounting change isnt going to make the company any more valuable, BTC trading higher will.
If that is the case, then explain how Tesla reported the value of their bitcoin at $184M for four straight quarters, and then reported it at $1.08B yesterday.

I havent looked into TSLA buying, where they buying BTC each qtr?

I would think TSLA would look at it kinda like stock repurchasing where it's opportunistic BTC buying to deliver value to SH.

But regardless of that reporting, my bigger point is that BTC holding companies aren't going to surprise the market with big beats each earnings call bc of this accting change.

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@NFLPlayerProps
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9:43p, 1/30/25
They didn't buy any additional bitcoin, they just adopted the new FASB standards and it worked exactly the way I explained it to you a couple of days ago.

Of course it won't provide a surprise big beat each quarter because each company that already owns bitcoin will only adopt the new rules once and then it's permanent.
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FobTies
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10:13p, 1/30/25
You asked me why TSLA reported the same BTC value for 4 straight QTRs, then you told me they didn't buy any over those quarters. You answered your own question.

Doesn't matter the accouting standard, if you aren't buying or selling over a reporting period, the uderlying value stays the same under either reporting standard. It only matters for tax, debt financing, borrowing, and stuff like that. Not equity valuations.

You also claimed that MSTR was "underleveraged in BTC", so you lose some credibility there. Many BTC traders seek out MSTR for that very reason, and Saylor embraces the high leverage.
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@NFLPlayerProps
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2:10a, 1/31/25
Re-read my post again. They reported the same value for the bitcoin for four straight quarters prior to the most recent one
(even though bitcoin's price was obviously variable) because they were reporting its value minus impairment, meaning the lowest value it had been while they owned it. Then, without purchasing any additional bitcoin, they reported the value of their bitcoin at more than 5x what they had been reporting simply because the new FASB rules they adopted dictated that they report fair value instead of impaired value. Literally exactly what I said would happen when a company adopts the new standard.

And that absolutely does change the equity side of the company's reported debt to equity ratio. That's why your guess at MSTR's debt to equity was 1,000% off, you were reading financial statements that reflected impaired values of their bitcoin instead of its actual value.

Very confused about why you're having so much difficulty grasping this. It's not complicated if you just slow down and think about the implications of the new rule on a company's net income, earnings per share, and debt to equity in the quarter they adopt it.
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mavsfan4ever
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In reply to @NFLPlayerProps • 8:03a, 1/31/25
AG
He's just saying that when their balance sheet changes due to the change in accounting standards, that's not going to be a one time surge in stock price bc that's already priced into the market (or at least it should be). If everyone knows how much bitcoin a company has then the change in accounting standards won't be a surprise and thus is already priced into the stock price.
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TxAG#2011
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10:36a, 1/31/25
At this point I am just buying more and more SOL. Its gonna rip
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@NFLPlayerProps
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In reply to mavsfan4ever • 11:03a, 1/31/25
mavsfan4ever said:
He's just saying that when their balance sheet changes due to the change in accounting standards, that's not going to be a one time surge in stock price bc that's already priced into the market (or at least it should be). If everyone knows how much bitcoin a company has then the change in accounting standards won't be a surprise and thus is already priced into the stock price.
Yes I understand that is part of what he's saying, but there's definitely still confusion about the FASB ruling itself and what it means.

In terms of efficient market hypothesis, I don't necessarily agree with that theory for several reasons. This discussion is a perfect case study for it. Here we are on the Business & Investing forum of a message board for a school with a pretty strong business school and great reputation overall. And we're on the crypto thread. So the folks in here have sort of de facto self-selected as having above average intelligence and investing acumen, and above average knowledge of bitcoin and related investments.

And yet the effects of this new FASB standard have caused confusion, disbelief, misinterpretation, arguing etc. If that is happening here among this group, do you really think the broader market understands exactly what's happening? Or is it possible there is some information asymmetry out there at the moment.
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mavsfan4ever
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In reply to @NFLPlayerProps • 11:26a, 1/31/25
AG
The price/market is not set by guys on message boards, even message boards where most people are fairly knowledgeable. The people/entities who set the price/markets and have the ability to move them completely understand what you are saying in my opinion (and thus I would think it's already factored into the price).
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@NFLPlayerProps
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11:39a, 1/31/25
I would argue there is still some existing information asymmetry regarding bitcoin itself among the entities who set prices. And if you don't understand bitcoin, it's nearly impossible to understand what MSTR is doing or why.

I'm not making any predictions about what will happen to MSTR's price after earnings, I'm just pointing out that there is about to be a very large positive change to many of their key metrics.
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Yukon Cornelius
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In reply to mavsfan4ever • 12:57p, 1/31/25
AG
I agree with NfL guy. I don't think the new accounting practice is priced in.

And what is certainly not priced in (and more important) is the able for companies to hold btc now and show true market value on their balance sheets. Which before companies like Tesla and MSTR were taking a risk accounting wise by buying btc.
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mavsfan4ever
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In reply to Yukon Cornelius • 4:59p, 1/31/25
AG
If yall are right then we should all be loading up on mstr. I guess I just don't get the logic. Everyone knows how much bitcoin the company owns, everyone knows about the accounting/reportings change, but everyone is just ignoring it when it comes to price bc the accounting/reportings change hasn't occurred yet?

That makes no sense to me, but maybe I'm wrong. And when I say everyone, I mean the people in the know who can move markets.

If what y'all are saying is true, the price should skyrocket when the change happens. I don't expect that to happen. There may be a small increase but I doubt it corresponds to the percentage increase that their bitcoin holdings will rise.

Either way it'll be interesting to watch it play out.
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Yukon Cornelius
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In reply to mavsfan4ever • 5:07p, 1/31/25
AG
Well guess we could be talking about two things at once. Price of mstr and price of btc. Personally I see no reason to buy mstr instead of btc.

In regard to the accounting name not priced in I was speaking in terms of BTC price not MSTR. I think mstr getting show big gains in a few days will cause a btc rally.

No idea about MSTR price.
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@NFLPlayerProps
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5:19p, 1/31/25
Again, I have not made any predictions about MSTR's price after earnings. I'm just explaining what is going to happen with the reported value of their bitcoin early next week. Obviously many weren't aware, I'm filling that knowledge gap. Use that information however you see fit.
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FobTies
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In reply to @NFLPlayerProps • 6:18a, 2/1/25
Quote:
That's why your guess at MSTR's debt to equity was 1,000% off

Lol, it wasn't "my guess". It's a simple ratio posted on every financial stat site that processes MSTRs balance sheet. People can go look for themselves now, it's 1.13.
https://stockanalysis.com/stocks/mstr/financials/ratios/


@NFLPlayerProps said:

Very confused about why you're having so much difficulty grasping this. It's not complicated if you just slow down and think about the implications of the new rule on a company's net income, earnings per share, and debt to equity in the quarter they adopt it.


Not having any trouble at all. That financial reporting change has no material impact to the value that the market assigns to MSTR, or any other equity holding significant BTC. If anything, it could expose them to future negative tax implications.

Whats confusing is that you seem to think MSTR is underleveraged BTC when they are probably the most leveraged BTC player in existence.
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@NFLPlayerProps
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7:13a, 2/1/25
You still don't understand why the financial statements don't reflect reality. Incredible.
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FobTies
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In reply to @NFLPlayerProps • 7:36a, 2/1/25
@NFLPlayerProps said:
You still don't understand why the financial statements don't reflect reality. Incredible.

You are desperately trying, and failing.

I totally understand there is an upcoming accounting standard change. You are the one unable to understand that it's meaningless to their actual underlying valuation and leverage.

My main point about MSTR was that they are highly leveraged BTC. It's a simple concept which you refuted by claiming they were under leveraged.

Anyone reading this can understand what I'm saying, except you.
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Yukon Cornelius
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In reply to FobTies • 7:46a, 2/1/25
AG
How could it be meaningless if their balance sheet jumps in billions of assets in a single day
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FobTies
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In reply to Yukon Cornelius • 8:18a, 2/1/25
Yukon Cornelius said:
How could it be meaningless if their balance sheet jumps in billions of assets in a single day


If you report a house at it's original cost in 2020 for your net worth, then the next day report it at current market value, does your real net worth skyrocket? No, bc your neighbors, banks, and everyone else in market has already been valuing the house at it's current value.

You can't argue on one hand that reporting BTC at $16K then $100k each is some major change that affects the reality of their leverage and valuation. Then also argue it's uncertain if that will affect the MSTR sharesprice. That's nuts.

You guys just don't get it. It's fine.
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Yukon Cornelius
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In reply to FobTies • 8:53a, 2/1/25
AG
Your net worth would increase actually.
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FobTies
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In reply to Yukon Cornelius • 9:53a, 2/1/25
You still don't get it.

I don't think you are capable of understanding the difference between actually adding new real assets to balance sheet, versus changing the reporting number on existing assets.

The market has already been recognizing MSTR bitcoin gains, now the company is just recognizing it in their reporting. It's not rocket science.
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Yukon Cornelius
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In reply to FobTies • 10:20a, 2/1/25
AG
No need for insults.

If you add a new asset your net worth goes up. If you change your value of an existing asset your net worth goes up.

Let's take an LLC for example. It can be quite difficult to price an LLC. You need to get it appraised. If you go a few years and get it reappraised and the value is higher your net worth is now higher.

In regards to MSTRs price or how the market is valuing it I really don't know. And neither do you. It could be priced in or it could not. We will see.

Ultimately I have little interest in MSTrs price. I'm concerned with BTC as that is my investment not MSTR. MSTR getting to show the true market value of their btc is good for btc and I don't think that has been priced in at all for BTC's price value.
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mavsfan4ever
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In reply to Yukon Cornelius • 10:29a, 2/1/25
AG
Obviously. But if the market already knows the value of an LLC's assets before the appraisal is done (everyone knows how much bitcoin mstr has and the price of bitcoin is public),, then the llc's price in the market isn't going to be affected. If they sold before or after the change in accounting, a hypothetical buyer would pay the exact same amount.
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Yukon Cornelius
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In reply to mavsfan4ever • 10:34a, 2/1/25
AG
Potentially. Is MSTR trading at a premium to its NAV? Why? Getting to report at fair market value it's insane btc stash could add value. Or it could not. But again ultimately for me I have little interest in MSTR. It could also add value by allowing it to take on more debt etc.

My view point this entire is how does the reporting change affect btc. And since MSTR is the largest one it'll have the biggest potential for BTCs price. Which I think it'll have a positive impact on BTCs price.
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mavsfan4ever
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10:54a, 2/1/25
AG
Yea I agree the accounting change is positive for bitcoin. And it's certainly not a negative for the companies holding btc and may be a small benefit.
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FobTies
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In reply to Yukon Cornelius • 11:25a, 2/1/25
Yukon said:

In regards to MSTRs price or how the market is valuing it I really don't know. And neither do you. It could be priced in or it could not. We will see.


I know with 100% certainty the market is not valuing MSTR's BTC holding at $16K each, if that's whats burried on their BSheet. They are valuing it at the BTC trading price. Just bc you don't understand that, doesn't make it any less true.

We aren't talking about appraising subjective or complex assets. BTC has a market price that is the same for everyone, at any point in time. Variances in how companies report the value of their holding has no bearing on price of BTC.

A Larry Fink offhand comment about a hypothetical increase in sovereign wealth BTC holdings has more impact on price of BTC than any new bookkeeping standard.
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