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After the latest share price increase, the IT service provider is holding 525 million US dollars in its Bitcoin Rush scam war chest. Dump in sight?

On October 27, 2020, Kevin Rooke published data via Twitter showing that MicroStrategy is already deep in the black thanks to its Bitcoin investment. Or would be, because the profits from the IT company’s swollen Bitcoin portfolio have not yet been realized. Is the Bitcoin dump coming from MicroStrategy?

The company announced the purchase of a total of 38,250 Bitcoin (BTC) in August and September 2020. This stock had a value of $425 million. Since then, the Bitcoin price has risen to $13,745. MicroStrategy currently owns $535 million of Bitcoin. This represents an increase of approximately $90 million in the value of MicroStrategy’s Bitcoin reserves within three months. This exceeds the combined net revenues of $78 million that MicroStrategy has generated over the last three years.

One of the reasons MicroStrategy CEO Michael Saylor BTC cited for the Bitcoin purchase was a more promising return on investment compared to „hodlning“ a cash reserve.

The purchase of Bitcoin, valued at $425 million for the quarter, offers shareholders a higher potential return than holding such amounts in cash and has increased MicroStrategy’s overall visibility in the marketplace.

Saylor had already written off Bitcoin

In August, MicroStrategy acquired the crypto currency as its primary reserve asset and initially invested $250 million for 21,454 BTC. As a result, an additional $175 million was sought to purchase a further 16,796 BTC. Although the company added digital assets in its quarterly report for the first time in Q3 2020, it reported losses of $14.2 million. In response, the Company stated that it would make the purchase and sale of Bitcoins subject to the Treasury Reserve Policy.

As late as 2013, Saylor declared Bitcoin virtually dead and predicted a bleak future for the asset in the crypto currency:

Bitcoin’s days are numbered. It seems only a matter of time before it suffers the same fate as online gambling.

Bitcoin Dump by Microstrategy: conceivable, but unlikely

However, since the initial $425 million investment, Saylor’s public opinion has turned 180 degrees on this issue. In September, Anthony Pompliano’s podcast explained that in the meantime he could no longer remember the tweets he had received. He is partly ashamed of his statements against Bitcoin at that time. If Saylor is true to his word, there will probably not be a massive Bitcoin dump by MicroStrategy in the short to medium term:

There are many traders in the market who do not understand the „Long“ mindset. I buy it for the guy who will work for the guy who will be employed by the guy who will be employed by the guy who will be employed by the guy who will be employed by me in 100 years,