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From Gold to Greenbacks: A Look at the US Dollar’s Devaluation, Manipulation and Militant Backing

26/02/2021 by Idelto Editor

228 years ago the U.S. dollar was created and ever since then, the national currency has been both powerful and controversial at the same time. Moreover since 1971, after being backed by precious metals for decades, American dollars have been backed by nothing and estimates say a quarter of the U.S. monetary supply was created in 2020 alone. The U.S. dollar conflict has led a number of analysts and economists to believe the U.S. monetary hegemony is on its last leg.

The Story of the US Dollar’s Devaluation

When you talk to someone about bitcoin, they often grow confused and say that it is too complicated for them to understand. However, when you ask them if they understand the meaning of fiat currency and how the U.S. dollar operates, they will likely be clueless about that matter as well. It’s likely the reason the very structure of how it operates continues to this day, without question from the citizenry, but has fallen victim to the mistakes of the past.

People should understand that the Federal Reserve is not a federal entity and it doesn’t have reserves either. The Federal Reserve, otherwise known as the Fed, is a private and independent organization from the U.S. government. However, since the creation of the central bank in 1913, the United States government has codified all of its operations.

The U.S. dollar was officially created in 1792 and was created with the likeness of the Spanish dollar. In fact, the Mexican peso and Spanish dollar were legal tender in the U.S. up until 1857. Years before the USD started, the country’s Continental Congress decided in 1785 that the dollars and coinage would be backed by precious metals.

Between 1863 and 1933 the U.S. issued a paper currency called “gold certificates.” Basically the bearer of a gold certificate U.S. denominated unit of currency owned a corresponding amount of gold bullion. In 1933 U.S. gold certificate bills were withdrawn from circulation and citizens were restricted from owning them until 1964. A rare series of 1934 gold certificates were also created, as “promise to pay” was changed to “as authorized by law.” Interestingly, the type of representative money called “silver certificates” also started in 1863 but remained in circulation until 1964.

At that time, the measurement of 375.64 grains of fine silver was a standard example until the U.S. decided to leverage the decimal ratio. U.S. dollars, particularly the paper form that followed coins, were later called “Federal Reserve Notes,” after the infamous Federal Reserve Act of 1913. On Christmas Eve of that year, President Woodrow Wilson helped invoke the Federal Reserve.

Back in 2009, the year Bitcoin was born, the author Thomas Allen wrote a comprehensive piece on “America’s First Flirtation with Fiat Money,” which happened during the War of 1812. Allen explained that gold was undervalued before the War of 1812, and U.S. money was primarily dominated by precious metal standards. In order to fund the Civil War, the U.S. also flirted with unbacked currency when the government issued Greenbacks (1861–1862). Similarly, Greenbacks were payable to the owner as authorized by law but not by gold or silver coinage.

From the 1800s to the 1900s, the U.S. economy and its currency backed by precious metals grew. At the same time, other types of markets started to swell as well, like stock markets and the creation of central banks. Paper money was issued in 1862 without backing and was invoked to pay for Civil War expenses. In 1812 as well, the U.S. created unbacked paper notes to fund the War of 1812. Before the creation of the Federal Reserve, in 1878 the U.S. temporarily reinstated silver and gold coinage.

In the 1800s up until the present day, bankers and stock market players rule the roost in regard to the U.S. economy. Most people don’t know but in 1863, the electrician Edward A. Calahan created a telegraph receiver with the ability to print letters and numbers onto paper tape. Financiers called the invention the “stock ticker” and at the turn of the century, the ticker technology was used to create bucket shops.

Prior to the Fed being introduced, the Bank of England, Swedish Riksbank, and Banque de France were the first to initiate the consortium of modern central banking. In the late 1800s, stock market players during the turn of the century were accused of running ‘bucket shops.’ The bankers at the time gambled against their customers’ funds and were caught on a few occasions. In 1906, a U.S. Supreme Court decision created a standard definition of the bucket shop.

“An establishment, nominally for the transaction of a stock exchange business, or business of similar character, but really for the registration of bets, or wagers, usually for small amounts, on the rise or fall of the prices of stocks, grain, [and] oil,” the 1906 Supreme Court ruling notes.

Financial Panics and a Cabal of Bankers Bolstered the Creation of the Federal Reserve

Following the ruling, the U.S. economy was very fragile and in 1907, there was a banking panic called the “Knickerbocker Crisis.” The crisis saw a nationwide run on banks and trusts throughout the United States. Because of the “1907 Bankers Panic,” Americans did not trust the U.S. banking system.

Jekyll Island has been a destination for the world’s elite for more than 3,500 years according to historians. The picture above shows the first transcontinental telephone call that was made there two years after the creation of the Federal Reserve. The web portal federalreservehistory.org says the “secret gathering at a secluded [Jekyll Island] off the coast of Georgia in 1910 laid the foundations for the Federal Reserve System.” Pictured Left to right: Welles Bosworth, S.B.P. Trowbridge, J.P. Morgan Jr., William Rockefeller, and Theodore N. Vail at Jekyll Island.

The financial panics following the scare in 1907, plus Wall Street bankers who were members of the ‘Money Trust’ or the ‘House of Morgan’ pushed President Woodrow Wilson to enact the Federal Reserve Act. On December 23, 1913, Wilson, with the help of the U.S. Congress at the time, and the Money Trust banksters created the central bank in order to stabilize long-term interest rates, the country’s monetary supply, and employment.

From this point forward, U.S. dollars became Federal Reserve Notes (FRNs), but were still redeemable for precious metals (silver and gold) up until 1933. The Money Trust bankers, which consisted of members of the Morgan, Rothschild, Heinze, Rockefeller, and Warburg families, not only influenced markets, but also politicians like the 32nd president of the United States, Franklin Delano Roosevelt (FDR). A quick look at the St. Louis Fed documents and the Pujo hearings show how FDR was the House of Morgan’s puppet.

Franklin Delano Roosevelt (FDR) also played a huge role in devaluing the American dollar and he worked secretly with the bankers from the House of Morgan at this time.

Financial panics in America again created an excuse for FDR to work with the bankers behind closed doors. As mentioned above, U.S. dollars were once redeemable for gold, but FDR’s bank holiday and the banning of gold ownership changed all that in 1933. FDR’s Executive Order 6102 signed on April 5, 1933 “forbid the hoarding of gold coin, [and] gold bullion.”

It seems that after removing the ability to redeem gold, the Federal Reserve, U.S. government, and other worldwide central bank members realized the fiat game without redemption may not last long. So 11 years later in 1944, the Bretton Woods pact was agreed upon, which was the first step in establishing the petro-dollar.

At that time, all of the World War II Allied nations participated and agreed that the cabal of central banks would maintain exchange rates based on the U.S. dollar. Instead of using the gold standard, a country would redeem its currency in USD rather than gold.

Vietnam War Expenditure Opens the US Dollar’s Can of Worms

As usual, war expenditure made it so the Federal Reserve, the managers of the U.S. currency continued to create a lot more dollars. Part of the Bretton Woods deal was the U.S. dollar was used because, at the time, the U.S. held three-quarters of the world’s gold. Meaning, the U.S. government, and Federal Reserve were trusted because the alleged gold could back the monetary supply.

America’s wars have been the number one reason for excessive money creation without backing. Wars like the War of 1812, the Civil War, the Vietnam War, and all the conflicts in the Middle East are caused by today’s financial incumbents and war profiteers. Today is no different as this week, Democrat Joe Biden has become the third U.S. President in a row to airstrike Syria.

During the Vietnam War, war expenditure was so massive other countries started taking notice of the U.S. printing massive amounts of USD. President Richard Nixon was then forced to act and in 1971, Nixon announced that the gold standard was completely removed from backing U.S. dollars.

But Nixon knew that the U.S. dollar had to have something else to keep the country’s monetary hegemony alive and well. While removing the U.S. currency from the gold standard in 1971, at the same time Nixon also made a deal with Saudi Arabia. The two countries decided that oil prices would be set and sold in USD.

Essentially that meant and still means for a number of countries today, anyone who wants to purchase oil must trade their currency for U.S. dollars. Following the deal with Saudi Arabia, the remaining OPEC countries followed suit and priced their oil in U.S. currency as well.

After the Bretton Woods pack started to crumble because the Fed went crazy printing money for the Korean War and the Vietnam War, a number of countries like France wanted their gold reserves sent back. After the ‘Nixon Shock’ in 1971, the U.S. leveraged the petro-dollar deal to keep the USD strong, but also needed military strength to keep the game going.

From this point forward the unaudited Federal Reserve and the U.S. military-industrial complex grew massive. Under President Reagan, Bush, Clinton, GW Bush, Obama, Trump, and even the current President Joe Biden, battles in the Middle East have continued relentlessly in order to keep the petro-dollar strong. For instance, this week the Biden administration authorized unconstitutional airstrikes over Syria without the approval of Congress.

American generations have been at war every year for decades on end since this time. Just before 2008, the descendants and friends of the same banking families from the House of Morgan wrecked the American economy by gambling the country’s mortgage sector. The unaudited Federal Reserve created massive amounts of USD at this time as well to save the economy and further devalued the unbacked FRNs.

Almost a Fifth of America’s Monetary Supply Was Created in 2020

After Covid-19 it has been much worse, as the coronavirus has been leveraged as an excuse to create unlimited amounts of U.S. Dollars. In 2020 alone, estimates show between 23.6% to 30% of all the USD ever created was issued in less than 12 months.

“M2 consists of M1 plus savings deposits (including money market deposit accounts); small-denomination time deposits (time deposits in amounts of less than $100,000),” the Federal Reserve notes. The U.S. central bank has never been audited since its creation and provides its own data published at a monthly frequency.

For decades on end, the U.S. government has experimented with creating massive amounts of unbacked money and it’s usually done to fund wars like the War of 1812, the Civil War, Vietnam War, and literally all the rest of the battles. Covid-19 has allowed the Federal Reserve to create a whole lot more than all the war expenses in the U.S. combined.

For all these reasons, sound money advocates, precious metals supporters, and a great deal of cryptocurrency supporters want alternatives to modern central banking and fiat. Bitcoin’s mathematical, calculated, and scarce supply is refreshing to people in a world filled with fiat manipulation. Bitcoin and a number of cryptocurrencies are nothing like the U.S. dollar, and it’s probably the reason why wealth managers in 2021 are shorting USD and long bitcoin.

Anyone can easily see that the U.S. dollar’s value has deteriorated greatly over the course of its history. It’s fairly understood among economists that the U.S. currency is not sustainable in this fashion for very much longer, and many other fiat currencies are in the same boat.

Bitcoin is the liferaft for many individuals and organizations in order to escape the devastation or get caught in the wake of the U.S. currency’s collapse.

What do you think about the history of the U.S. dollar? Let us know what you think about this subject in the comments section below.

Filed Under: 1933, Bucket Shops, civil war, Devaluation, Dollar, Dollar History, Economics, End the Fed, English, FDR, fiat currency, gold, Greenbacks, House of Morgan, Joe Biden, JP Morgan, manipulation, Money Trust, News Bitcoin, Richard Nixon, silver, Stock Brokers, the fed, Unbacked Bills, US Dollar, US economy, USD, Vietnam War, War of 1812, Wars, Woodrow Wilson

Researcher Finds an Old Twitter Profile May Have Been Satoshi Nakamoto’s Account

22/02/2021 by Idelto Editor

On February 22, 2021, an author published a post on substack.com about an anonymous Twitter account that may have belonged to the mysterious Satoshi Nakamoto. The researcher discovered a Twitter account dubbed ‘Goldlover,’ and found some interesting coincidences with the account’s tweets and Bitcoin’s creator.

The Curious Goldlover Tweets

An author called Varun published an interesting analysis of a specific Twitter account that may or may not belong to Bitcoin’s creator. Varun said in his research analysis that he stumbled upon the Twitter account called ‘Goldlover,’ and noticed that the account was quite “chatty” for a period of time.

Running bitcoin

— halfin (@halfin) January 11, 2009

The researcher also said that Satoshi Nakamoto was the same way up until the inventor left the community for good. The Goldlover account (@fafcffacfff) was created in May 2008 and Varun says that a script was written. The Goldlover tweets mentioned gold quite often, and Varun’s findings suggest that the ‘gold’ terminology may be in reference to “Bit Gold.”

“The Wall of Interesting Tweets” compiled in Varun’s blog post. (Image credit: Varun – offthetrack.substack.com)

“On September 17th, 2008, this account made a reference to Digital Gold Currency,” Varun’s post highlights. “In between an incredible amount of nonsensical tweets about gold, sometimes there would be tweets which referenced decentralization, financial crisis, people losing their homes, fiat currency, criticism of the Federal Reserve,” Varun says. “These are all hallmarks of talking points used by Satoshi in his emails and forum posts which are well known, post-Bitcoin announcement.”

For instance, on December 19, 2008, Goldlover said:

The Great Stock Panic of 2008 was so mercilessly brutal that no sector escaped its ravages.

What is also quite interesting is that no other Twitter accounts back in January 2009, except for Hal Finney, tweeted about Bitcoin. “Based on all of this, this is good enough for me to feel quite confident that this indeed was Satoshi’s original anonymous Twitter account,” Varun notes.

On January 11, 2009, Hal Finney tweeted about the crypto asset and not too long after that Goldlover wrote: “From: Satoshi Nakamoto – 2009-01-11 22:32 Bitcoin v0.1.2 is now available for d.”

The very same day on January 29, 2009, Goldlover also said:

It’s completely decentralized with no server or trusted parties.

Exploring the Limitless Depths of Satoshi’s Mind

Ever since Varun published his post about the alleged Satoshi Nakamoto Twitter account, people have been interacting with Goldlover’s 12-year-old tweets.

“Thanks for changing the world Satoshi,” an individual wrote on Monday.

If you know where there are oranges in the sky in Winter Garden, you are on the right track for locating a treasure box.

— GoldLover (@fafcffacfff) February 11, 2009

“Feeling sufficiently anonymous with this cryptic account run since May 2008, this might have been a slip to now start linking up and showing up as the 2nd tweet ever to mention Bitcoin,” Varun’s substack.com blog post states. “If Hal was Satoshi, then why continue tweeting from this unknown account, which barely had any followers?” Varun asks. The researcher said that he could have slept in every Saturday morning, but this Twitter account had him on the hunt for Nakamoto.

The report concludes:

Having concluded this was Satoshi – we don’t know who, the rest of the tweets now provide an insight into his mindset, and each tweet here needs to be branched out and explored in limitless depths.

At the end of Varun’s theory, he left a mysterious tweet from Goldlover which talks about a treasure box with oranges in the sky.

“If you know where there are oranges in the sky in Winter Garden, you are on the right track for locating a treasure box,” Goldlover tweeted.

Just recently, a group of armchair sleuths have been on the hunt for Satoshi’s stash of bitcoins, because they believe Nakamoto left the coins to be the greatest treasure hunt ever. Despite the coincidences and the extremely old and cryptic tweets from Goldlover, we don’t know for sure if the Twitter account actually belonged to Satoshi, but today many people are speculating.

What do you think about the Goldlover Twitter account that may belong to Satoshi Nakamoto? Let us know what you think about this subject in the comments section below.

Filed Under: ANON, anonymous creator, Bitcoin, Bitcoin (BTC), Bitcoin Creator, Bitcoin Inventor, Bitcoin's Creation, English, Featured, gold, Goldlover, Goldlover Twitter, Hal Finney, Nakamoto, News Bitcoin, Satoshi, Satoshi Nakamoto, Twitter, Varun, Varun's Findings

Pricing Gold, Food, and Altcoins With the BTC Denominator: How to Measure an Asset’s Worth in Bitcoin

21/02/2021 by Idelto Editor

On February 21, bitcoin touched a lifetime price high at $57,844 per unit after the crypto asset’s market valuation crossed the $1 trillion zone for the first time in history the day prior. Meanwhile, a number of digital assets have seen fiat values increase as coins like litecoin, ethereum, and others gather gains against the U.S. dollar. However, when bitcoin is the base denominator in terms of value, a lot of coins have a long way to go to catch up.

Measuring Alternative Crypto Assets With Bitcoin

The crypto asset bitcoin (BTC) has seen phenomenal gains and a lot of other digital currencies have seen price increases as well. For instance, ethereum (ETH) is the second-largest digital asset in terms of market capitalization, and ETH has touched the $2,040 price range.

Now ETH has seen pretty decent gains against the U.S. dollar, as its up a decent 76.32% during the last month, and 249.90% over the last three months. Traditionally people price everything in their local fiat currency like U.S. dollars or euros, but things look a whole lot different when other crypto assets are priced against or with BTC.

Pricing Gold, Food, and Altcoins With the BTC Denominator: How to Measure an Asset's Worth in Bitcoin
Bitcoin (BTC) hit an all-time price high on February 21, 2021, hitting $57,844 per unit against the U.S. dollar. But what if we measured other assets in BTC?

For instance, data from messari.io shows an ether priced in bitcoin is worth 0.0341 BTC and on Tradingview the price is a hair higher at 0.0343 BTC at the time of publication. Now even though ether has seen decent gains against the U.S. dollar in 2021, it was a lot higher in comparison to BTC back in 2018.

Pricing Gold, Food, and Altcoins With the BTC Denominator: How to Measure an Asset's Worth in Bitcoin
In 2018, a person could get a whole lot more BTC with a single ETH. This year, an individual will get far less BTC with a single ether.

At that time in January 2018, a single ETH was around 0.1090 BTC. Bitcoin’s price at the time was around a third of what it is today, while ether’s value was closer to where it was back then albeit a touch higher. The same can be said for a myriad of other alternative assets in the crypto economy.

Litecoin (LTC) is a good example, as LTC is a cryptocurrency with a market valuation of around $15.5 billion and holds the eighth largest valued market cap. Against fiat, LTC has done well this year increasing over 66% during the last month against the U.S. dollar.

Pricing Gold, Food, and Altcoins With the BTC Denominator: How to Measure an Asset's Worth in Bitcoin
Litecoin (LTC) also was worth a whole lot more in BTC terms back in February 2018.

LTC has gained 157% against the dollar for the last three months, but has yet to capture the coin’s all-time high (ATH). Litecoin is still 38% away from the ATH three years ago, which was $369.32 per LTC. Back in February 2018, a single LTC was around 0.019533 BTC but today one LTC is swapping for 0.003966 BTC.

Pricing Everything in Bitcoin Gives a Different Perspective

People can price anything in BTC and in other common denominators or vice versa. For instance, a person can get a 2021 Lamborghini Huracan EVO today for 5.08 BTC, a brand new Honda Accord is only 0.44 BTC. You can get a pristine 3.0-carat diamond ring for a single BTC and 0.12 BTC buys the average American food for a whole year.

Pricing Gold, Food, and Altcoins With the BTC Denominator: How to Measure an Asset's Worth in Bitcoin

Back in the day when a single coin crossed parity with a single Federal Reserve note ($1), it was a milestone. Then years later, it passed the value of one troy ounce of fine silver ($27), and everyone noticed.

Years later the price surpassed the value of one troy ounce of fine gold and that definitely got some attention. On Saturday, BTC ripped into another ATH and crossed parity with one kilo of fine gold. The fact of the matter is, the common denominator can be perceived a whole lot differently when measuring things in BTC or against it.

What do you think about measuring assets and other cryptocurrencies in bitcoin? Let us know what you think about this subject in the comments section below.

Filed Under: 1 kilo of gold, 1 oz of gold, 1 oz of silver, Altcoins, Bitcoin, Bitcoin (BTC), BTC Denominator, diamond ring, English, ETH, Ethereum, Fiat Value, Food, gold, Honda Accord, lamborghini, LTC, Markets and Prices, Measure, News Bitcoin, USD

As Millions Drown in Today’s Poverty Trap, Macro Strategist Raoul Pal Says ‘Bitcoin Is a Life Raft’

18/02/2021 by Idelto Editor

Global Macro Investor CEO, Raoul Pal, discussed the current economy this week and asked his 394,000 followers if people are using the wrong denominator when it comes to certain economic factors. One thing’s for certain, wages have not increased, no matter the common denominator people use to measure today’s salaries. Pal wholeheartedly believes that bitcoin is the only “life raft” he knows of that has “the optionality to change this [issue] over time.”

Macro Strategist Asks: ‘Do We Have the Wrong Denominator?’

Raoul Pal is a bitcoin bull and he’s said many times that the decentralized crypto asset is extremely “hard money.” This week on Twitter, Pal discussed a few denominators people leverage to measure things in economics. He asked his social media followers whether or not they thought we had the wrong denominator.

The former Goldman Sachs executive and Global Macro Investor CEO, Raoul Pal.

“Many of us believe that Fed money printing is creating an asset bubble. But when we switch the denominator to the Fed balance sheet equities look fairly priced,” Pal’s thread noted. When we look at SPX vs M2, the other measure people look at, equities are expensive but not wildly so…(it’s sort of just earning growth). Gold has done less well but ok (sort of [like] equities minus the earning growth),” Pal said.

As far as gold versus the M2, the entrepreneur says that the denominator has held its ground. M2 is the term used for a broad calculation of the easily convertible (liquid) money supply which includes checking deposits and cash.

SPX versus gold is 60% above its 100-year average Pal said and in his view, “gold is the best long-term denominator for assets.” Pal then said maybe a devaluation of the denominator is the real issue at hand.

“We think of it as the [Federal Reserve] creating bubbles, but maybe it’s all fairly priced considering the change in [the] value of the denominator? Much like Venz equities rise when the currency devalues,” Pal stated. “However, the situation is much worse when you look at wages, which have barely moved in 50 years in real terms, underperforming all assets massive due to massive demographic bulges, globalisation, and technology,” he added.

Wages have not increased alongside everything else paired against the common denominators. Wages have only kept up with a few products in the United States.

In the United States, all wages have outperformed things like cars, trucks, and oil, but when the common denominator is gold it looks inferior.

“Another way is [to] look at how many hours [of] work it takes to buy an ounce of gold… Wages allow you no investment opportunity,” the Global Macro Investor executive emphasized. Purchasing equities is a joke as well said Pal because the median person gets to buy next to zero. People have lost 90% of their purchasing power when it comes to buying property he stressed.

Pal continued:

And that explains the rise in debt – Households added to maintain purchasing power… This is a theme BTC market participants picked up a long time ago. BTC has massively outperformed both M2 and the Fed balance sheet. You could interpret BTC as a bubble. You could suggest it hasn’t reached its full price discovery as many adopt it as their life raft as Metcalfe’s Law kicks in.

Bitcoin Offers a Chance to Change This Dynamic

Whatever the case may be Pal said, bitcoin (BTC) has dramatically offset “the wages/purchasing power/denominator issue.” He said that he thinks it is the only chance people have this day in age for someone to expand their economic horizons.

As far as purchasing property, Americans have lost 90% of their purchasing power.

“It is literally the only chance the median person has to change this dynamic,” Pal asserted. “Especially young people who are in huge competition for jobs with boomers and their own massive generation and with technology and workers around the world, struggling to survive too.”

The Global Macro Investor executive thinks that the wage issue is forcing people to grow more upset and angry at the system. He noted that people feel poorer, they are poorer, they have more debt, and they need to obtain more debt, which is an “endless loop,” Pal stressed.

“We do have a different solution – [Bitcoin] and digital assets in general. It is a whole new asset class, that has incredible future expected returns from adoption effects and use cases. It also has the chance to fix our broken finance system. It also offers massive rewards for entrepreneurs,” Raoul Pal said.

As usual, Pal believes that bitcoin can help, as the average person is not included and the traditional financial system is growing less accessible. “The [average person] can’t own enough investments to make up for the difference,” he said.

Pal concluded:

It’s a poverty trap of the middle classes. Bitcoin is the only life raft I know of that has the optionality to change this over time. It will get overly speculative, it will burst but it will rise again. I don’t see many alternatives as most can’t be successful entrepreneurs or market wizards. They need something to invest in. Something with high expected future returns. Or they could lower their cost base via a safety net.

Pal is extremely bullish about bitcoin’s future and for quite some time, the former Goldman Sachs executive said he’s been “irresponsibly long’ toward bitcoin. The macro strategist detailed at the time, that he was also short on the U.S. dollar.

“My conviction levels in bitcoin rise every day. I’m already irresponsibly long,” he noted. Following those statements, Pal said he decided to allocate 10% of his company’s balance sheet toward holding bitcoin and sold all his gold reserves for a portfolio of BTC and ETH.

What do you think about Raoul Pal’s conviction toward bitcoin? Let us know what you think in the comments section below.

Filed Under: Asset Bubbles, Bitcoin, Bitcoin (BTC), commodities, cryptocurrency, Economics, English, Euro, Fed Balance Sheet, Federal Reserve, Global Macro Investor, gold, life raft, Macro Strategist, News Bitcoin, Poverty Trap, Precious Metals, Raoul Pal, U.S. dollar, USD, wage, wages

Microstrategy to Sell $600 Million Worth of Convertible Notes to Buy More Bitcoin

16/02/2021 by Idelto Editor

Microstrategy to Sell $600 Million Worth of Convertible Notes to Buy More Bitcoin

The publicly listed company Microstrategy announced that it has plans to purchase more bitcoin after acquiring 71,079 bitcoin during the last six months. On Tuesday, Microstrategy revealed its plans to sell $600 million in convertible senior notes to qualified institutional buyers in order to use the funds for bitcoin.

Selling Convertible Notes for Bitcoin

At around 7:59 a.m. (EST) on Tuesday morning, Microstrategy (Nasdaq: MSTR) CEO, Michael Saylor tweeted about a new private sale his firm is committing to in order to sell $600 million in convertible senior notes. Microstrategy’s announcement says that the notes will be unsecured, senior obligations of Microstrategy, and will bear interest semi-annually to holders. The notes will mature on February 15, 2027, and Microstrategy says that the firm can redeem cash for all the notes sold.

The announcement further reads:

Microstrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoins.

Microstrategy has purchased a great number of bitcoins and currently holds 71,079 BTC worth more than $3 billion using today’s exchange rates. The move to sell convertible notes is not unusual for the intelligence company as Microstrategy completed a $650 million capital raise to purchase bitcoins in mid-December.

Microstrategy to Sell $600 Million Worth of Convertible Notes to Buy More Bitcoin
A screenshot of bitcointreasuries.org and Microstrategy’s current bitcoin balance.

While Michael Saylor tweeted the latest announcement, bitcoin (BTC) prices were in the midst of reaching a new all-time high (ATH) on Tuesday morning. BTC shot up to $50,603 per coin on February 16, 2021, and has a market cap valued at over $900 billion today.

Following Saylor’s tweet, Michael Sonnenshein the CEO of Grayscale responded to the recent Microstrategy move. “Trying to catch up with Grayscale?” Sonnenshein asked, as the CEO’s Grayscale Bitcoin Trust holds a whopping 649,130 BTC worth $31 billion today.

A few other people responded to Saylor’s tweet with criticism and said: “Dude is full knowingly creating the biggest bubble in history, fu**ing legend.” The comment was blasted by a person who disagreed with the “biggest bubble” statement.

”If you think it’s a bubble you don’t get it, we are bursting the fiat bubble,” the individual said.

Digital Gold

Microstrategy and Michael Saylor have been relentlessly pushing the digital gold narrative and Saylor has said that the popular yellow precious metal gold is antiquated.

“If institutions want to move billion-dollar blocks of money around the globe, gold is a million times more expensive than bitcoin,” Saylor said. “And a thousand times slower. We can’t build a modern economy on antiquated technology,” the Microstrategy executive added.

Many people support Saylor’s perspective that BTC can be digital gold, a store of value, and something that offers investors long-term potential growth. “The narrative of bitcoin becoming the digital gold is gaining traction,” John Wu, the president of Ava Labs told news.Bitcoin.com on Tuesday.

“If that narrative comes to fruition, then the growth potential is off the charts as $50,000 per BTC equates to a market cap of roughly $931B, which is almost 9% of Gold at roughly $10.6T market cap,” Wu said.

The AVA Labs president further added:

If BTC meets Gold’s market cap, then that would be at least $500,000 per BTC.

With 71,079 bitcoin on hand and more to come after selling the convertible notes, Microstrategy will be a publicly listed company with almost as much bitcoin as one of the top BTC hedge funds. Shares of Microstrategy (Nasdaq: MSTR) dropped over 2%, after the CEO announced the company would be selling the notes for bitcoin.

What do you think about Microstrategy selling convertible notes to purchase more bitcoin? Let us know what you think about this subject in the comments section below.

Filed Under: Bitcoin, Bitcoin (BTC), bitcoin balance sheet, bitcoin treasury, bonds, BTC, BTC Treasury, Convertible Notes, digital gold, English, Fiat Bubble, gold, Michael J. Saylor, microstrategy, Nasdaq: MSTR, News, News Bitcoin, Selling for Bitcoin

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