BitStrategy

Share price down stream of BPS Process > Outcome

Hey mate, very interesting! Many concepts considered there. To touch on my perspective on a couple (only): As a citizen, I see any individual or entity choosing to store wealth in Bitcoin as a step in the right direction. A positive thing. As an investor, I judge how efficiently a company can acquire it.  As an investor, the means of acquisition, I see as being of less importance than what it appears you do. Although, as a citizen, of course I see producing desirable goods/services as being of importance to society.  To consider means of acquisition, let’s imagine two companies.  Company A sells phones.  In order to acquire the material needed to make the phones, they need to raise capital. They do this by selling shares/diluting shareholders. Let’s say the money raised is used efficiently, the phones are created and then sold, and the profit is greater than the dilution that occurred.  The company uses the profit, essentially generated by diluting shareholders accretively, to buy Bitcoin.  In order to determine how efficiently the company created shareholder value via these phone sales, one would need to understand how much Bitcoin was gained compared with how many shares were introduced to the market.  Company B sells fixed income products.  In order to fund the dividends, required to fulfill their fixed income obligations, they need to raise capital. They do this by selling shares/diluting shareholders. The money raised is used efficiently and the profit from fixed income sales is greater than the dilution that had/has to occur.  The company uses the profit, generated by diluting shareholders accretively, to buy Bitcoin. In order to determine how efficiently the company created shareholder value via these fixed income products, one would need to understand how much Bitcoin was gained compared with how many shares were introduced to the market. If the phone company can generate greater Bitcoin gains per outstanding share, then they may be more attractive to investors desiring ownership of a company that can efficiently acquire Bitcoin. Said shareholders would agree to the dilution, as they see it to be efficient/accretive, but the moment they felt the company was behaving or performing less efficiently they may consider selling their shares.  If the hypothetical phone company was instead a Bitcoin development/infrastructure company, the efficiency equation would still need to be considered. Unless the investment was philanthropic, which would be admirable. This is not remotely similar to a citizen who doesn’t opt in to his savings being debased. Citizens are forced to deal with the consequences of inefficient spending/dilution, while shareholders opt in to perceived efficiency. In addition, individual shareholders can’t create more shares themselves as opposed to citizens who can take out loans, increasing currency supply.  As an advocate for Bitcoin, I’m happy if any company chooses to store their profits in Bitcoin. I personally see the company selling fixed income as being able to outcompete the (hypothetical) company selling phones, in terms of efficient acquisition of Bitcoin. This, of course, is open to interpretation and could change at any moment.  I also strongly believe in a free market and competition and am grateful for criticisms of efficiency which may hold companies to higher standards, resulting in better outcomes. For this I’m grateful, but while I believe in criticizing the efficiency of acquisition, I disagree with criticizing the means.

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