December 8, 2020 MSTR files $400 million debt offering to buy more Bitcoin; December 4, 2020 8-K filing by MicroStrategy reporting new $50 million purchase of Bitcoin

December 8, 2020 6:00 PM MicroStrategy goes after more Bitcoin with a new filing to raise $400 million in debt to fund the purchase of additional Bitcoin. This is in addition to the $50 million from Friday’s 8-K filing.

MicroStrategy Announces Proposed Private Offering of $400 Million of Convertible Senior Notes

https://www.businesswire.com/news/home/20201207005918/en/MicroStrategy-Announces-Proposed-Private-Offering-of-400-Million-of-Convertible-Senior-Notes

December 8, 2020 Listen to Michael Saylor explain why he is adding Bitcoin to his company’s balance sheet
https://www.youtube.com/watch?v=Jb48Q5e4WVg

Item 8.01.
Other Events.

On December 4, 2020, MicroStrategy Incorporated (the “Company”) announced that it had purchased approximately 2,574 bitcoins for $50.0 million in cash in accordance with its Treasury Reserve Policy, at an average price of approximately $19,427 per bitcoin. As of December 4, 2020, the Company holds approximately 40,824 bitcoins that were acquired at an aggregate purchase price of $475.0 million, inclusive of fees and expenses.

https://www.sec.gov/ix?doc=/Archives/edgar/data/1050446/000119312520310787/d22733d8k.htm

Fidelity Digital Investments issues Research Report on including Bitcoin in Investment Portfolios

 

Many of us have retirement accounts with Fidelity.

They just issued a report on Bitcoin that I believe is very important. If you have the interest to learn about this new asset class that institutions are adopting in investment portfolios, give this a read

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https://www.fidelitydigitalassets.com/bin-public/060_www_fidelity_com/documents/FDAS/bitcoin-alternative-investment.pdf

A New Day is Dawning because of Bitcoin, Ethereum, Crypto Assets and the Blockchain

The majority of my research and analysis of late has been very focused on the Crypto-Asset sector. Equities hold little interest for me at the current valuations, which entirely reflect inflation due to Central Bank actions in regard to interest rates and money printing.

Within the Radar Fund tab above, I will post numerous charts to help explain the strength and growth in the Crypto sector. This growth has resulted in the Radar Fund posting a 184% gain YTD.

I am discussing Crypto here on the main page of my website because of the importance of the 2020 developments that extend well beyond the two main Blockchains of Bitcoin and Ethereum. Both BTC and ETH have had great years so far in regard to price growth, demand and broader participation. While this is very good news, the real story of the year is the expansion of business platforms using Blockchain technology to expand commerce and efficiency in many industries. This growth is demonstrated by the following:

1) The Radar Fund holds financial interests in 101 companies/platforms beyond BTC, ETH and LTC. The investment cost of these 101 holdings is a function of the current value of BTC and ETH, the two currencies used to purchase the financial interests in them. As the price of BTC and ETH rise, the cost of acquisition for the other tokens also rises as the current price of BTC and ETH are used to measure the purchase cost rather than the historical prices in effect at the time the other tokens were purchased. This daily real-time mark-to-market of acquisition cost when compared to the current market values of the 101 tokens purchased provides insight as to which platforms are growing faster or slower than the two main Crypto Blockchains of BTC and ETH. By performing this exercise daily and tracking results over time, I believe I am better at identifying the most valuable and accelerating growth businesses in the Crypto sector. The comparison additionally gives me a barometer of overall industry growth. If the basket of 101 tokens that form the Radar Fund industry component are generating price expansion faster than BTC and ETH it demonstrates investment money is flowing into industry faster than it is flowing into Crypto-currencies for holding purposes. To date, as of August 9, 2020, the industry component of the Radar Fund has grown above and beyond BTC and ETH by 39.22%. This industry growth is a key component of the overall YTD return of the Radar Fund’s exceptional 184% growth.

2) The significant and consistent expansion in the number of Bitcoin and Ether Wallets/Addresses further demonstrates the increased penetration and adoption of crypto. YTD, Bitcoin wallets have increased by 17%, and are projected to end the year with a total increase of 27%. YTD, ETH wallets have increased by 46%, and are projected to end the year with a total increase of 62%.

3) Institutional participation in the Crypto sector is expanding as measured by the growth in the use of Futures to hedge and meet obligations in crypto denominated transactions. Futures contracts Open Interest for BTC has reached approximately $5 billion, while Open Interest contracts for ETH approximate $1.5 billion. These are all-time highs in Futures activity Open Interest and demonstrates the growing acceptance and use of Crypto-currencies in the deal making and trading markets.

The array of businesses and industries that are represented by the Radar Fund holdings range from banking, insurance, hedging, travel and leisure, art, market place trading, identity and fraud protection, exchanges, media & entertainment, supply chain management and provenance, education, health, and each day the list expands. It is clear that the use of Blockchains as a technology platform for reducing costs and empowering parties to transact through direct peer-to-peer connections that execute based on established contracts that do not require middle-men to approve, oversee or control the contractual compliance is a better way of doing business in our digital world.

A new day is dawning.

July 2020 TJ Connolly’s thoughts on Bitcoin, Crypto, Blockchain, Banking, and a New Industry

July 27, 2020 This Link is to a discussion document I wrote for those new to or thinking about this industry sector
https://sway.office.com/FryuAW9w1zBbTTcC

July 2020 Crypto thoughts

The recent move of investment capital into the Crypto sector is evidenced by the growth in Market Capitalization and Daily Trading Volume

Bitcoin, Ethereum, and Crypto Assets in the Current Environment

July 7, 2020 UPDATE

The groundwork has been being laid for a significant move in prices. Over the past 24 hours the direction of that move in prices is becoming very clear to me. We are in my judgement going much higher in prices. I have been aggressively buying over the past 48 hours, with a particular concentration over the past 24 hours. My holdings YTD in Crypto are up 117% since December 31, 2019. The price movement is across the board, with DeFi and CeFi leading the charge. The currencies should follow suit. I am particularly focused in the currency sector on Ethereum. I expect a large price change here, greater than what I expect for Bitcoin.

From JULY 6, 2020

I typically focus on Crypto under the Radar Fund menu tab. Today, I believe it important enough to write a bit on Bitcoin, Ether, and other token assets that represent the DeFi sector of the Blockchain and Crypto Industry on the Main Page of this website.

Bitcoin and Ether have been treading water lately. Price moves have been relatively confined to a range that results in the lowest level of 10-Day price volatility that I have seen since 2017. Additionally, the daily unit volume of Bitcoin and Ether traded on exchanges is very low, approaching the lowest daily levels since 2017.

We are very close to a breakout in prices. The key indicators, impacted by the action on July 6, 2020, are strongly indicating higher prices. This could be a consistent and progressive move higher across the spectrum of Crypto Assets.

The overall market cap of the Crypto universe is presently $256 Billion. The daily trading activity is in the $30-$38 billion area.

In this relatively calm seemingly uneventful market sector there is significant movement in a sub-sector that is striking. It is the DeFi sector, or Decentralized Finance. This industry sector is developing rapidly, and recently investors have taken notice. Price appreciation in companies focused on this area is rewarding investors with meaningful returns. For example, consider the following:

1) The company Celsius is a new world banking enterprise. The company in a simple form accepts deposits of Crypto assets, such as Bitcoin and Ether (accepts many other crypto assets as well). Based on market demand for borrowing these crypto assets, an interest rate for loans is determined. Celsius pays its depositors 80% of the interest earned on lending activities. The interest rates being earned by these depositors is greater than 10 times the rates being earned in US $ deposits at traditional lending institutions. This business model has resulted in Celsius paying out the equivalent of $24+ million in interest to its depositors, lending activity of $6 billion, with $630 million in deposits. The value of the Celsius token was available for purchase at 3.5 US cents a couple of years back. Today it is prices at $.40+ cents. Since March, 2020, it has increased in value from 6.5 cents to its current value. Presently, Celsius is doing a Private Placement of a portion of its equity and has $15.7 million committed. https://app.bnktothefuture.com/pitches/celsius-network

2) Compound recently issued its token at approx. $50 per token. Compound represents a similar platform to Celsius, enabling the lending or borrowing of crypto assets. Supplying tokens as a depositor earns market rate interest as determined by the lending rate to borrowers. Somewhat different than Celsius, the payout by Compound is not set at 80% of the borrowing rate and may therefore exhibit different rates of return than Celsius. The Compound token zoomed 7X upon its issuance moving from $50 to $350. Presently the Compound token is priced at $203.

3) Kyber Network is one of the earliest Token Swap platforms. This enterprise and its CEO have been a favorite of mine since the company’s inception. Unlike a Centralized Exchange the KNC platform does not hold your assets. You connect your wallet to Kyber, designate the token you wish to use for an exchange from your wallet and the token you wish to receive from the KNC Swap technology and that is broadcast over the blockchain and filled. KNC assembles the bid and ask prices across multiple exchanges to deliver a fair market value to you in the exchange process. The speed and security of this platform make this one of my favorite platforms for building The Radar Fund portfolio.

4) Synthetix

5) Switcheo

Randomness coupled with hit and run moves

June 27, 2020
The current environment across so many sectors reflects uncertainty and quick moves in and out of asset classes. Investors are chasing returns, some succeeding and others getting caught in the back wash. This is a dangerous market.

I have done well by being patient and very selective in the equity market, avoiding the chase and turbulence, waiting for better market set-ups. In the crypto market there are very new and significant moves under the flatness of the leaders Bitcoin and Ether.

This past week saw more weakness than strength in equities. The parabolic curve of the Covid-Virus infections spreading across the U.S. is unsettling the economic promise of getting back to normal. The sugar high of FED intervention is waning it would appear, and the instability of U.S. leadership is leaving us rudderless. The 700 point DJIA decline on Friday has created a weekend of uncertainty, and with no positive news on Saturday or Sunday, the market could be in for a very bad Monday. The over-valuation of equities on an historic basis coupled with the randomness of leadership in a crisis environment leaves us set-up for more quick turns and mis-directions. I will remain steadfast in my view that “hiding” in Gold miners and equity dedicated cash is the best position to be in. I do have a small short position on the S&P 500 as I look to Sunday night’s/Monday’s opening.

Crypto is very unsettled as well. Strong abnormal price movements are taking place in the DeFi sector, along with rates on various tokens at extremely high levels given short-term demand for buying tokens on margin. Rates as high as 23% are being offered, and price moves of 2X and 3X are happening in this sector. As I write this, there is a general pullback occurring with some of the more volatile increases being sold to lock-in gains. This is occurring while we have price weakness in Bitcoin and Ether, both trading near recent lows of $9,000 for BTC and $225 for Ether. Something strange is going on, and I am hard pressed to put my finger on it.

I will write more over the weekend under the 187 Portfolio and the Radar Fund tabs, trying to explain my actions in this unusual environment. Presently, my returns on equity Y-T-D approximates 20%. My Y-T-D return on Crypto approximates 93%. Very strong results, but in this environment they could be gone in a flash. I have been here before and I know how quickly things may change. Be careful out there!

I have returned! Been away, moving furniture and stuff from vacation home for upcoming renovation.

Amazing what you accumulate over 32 years. My wife and I as newlyweds bought a home in Vermont to give us an alternative lifestyle out of Manhattan back in 1988. Children came, and we spent many days in Vermont raising out children to ski, to enjoy the mountains, to have a concentrated time with Mom, Dad, and each other, and to build friendships that complimented their New York experience. Now after 32 years, it is time to renovate. It is amazing how much stuff you accumulate in one location over that time. Memories and junk. Love the memories, but clearing out the house took forever. In any event, the sledge hammers have the house now. Can’t wait for November when it will be finished.

Good to be back and writing with you again.

Be safe and healthy,

Best,

Tom