His bitcoin strategy may not work for you.
If If you’ve seen the last few videos on Bitcoin this year, you might have come across Michael Saylor for his advice on Bitcoin and the cryptocurrency market. Michael Saylor is the founder of MicroStrategy, which has made large investments in Bitcoin since 2020.
Michael Saylor is a latecomer in the cryptocurrency space, but he’s making a huge impact as an investor. His company, MicroStrategy, owns approximately 91,579 Bitcoin, valued at $ 3.45 billion at the time of this writing.
Chronologically, these are the steps MicroStrategy has taken since 2020 when it came to buying Bitcoin.
August 11th, 2020. MicroStrategy CEO Michael Saylor announced that the Nasdaq-listed business intelligence company is making a long-term investment of $ 250 million in Bitcoin.
2. September 15, 2020. Saylor doubled the number and added another $ 175 million to MicroStrategy’s balance sheet. That $ 425 million bought MicroStrategy at 38,250 BTC.
February 17, 2021. Saylor announced that MicroStrategy had sold $ 900 million in debt to buy more BTC. Bitcoin was $ 49,600.
4. March 1, 2021. MicroStrategy held 90,859 BTC, which it bought for approximately $ 2.2 billion.
June 5, 2021. MicroStrategy sold $ 400 million corporate bonds to buy more Bitcoin.
“When Bitcoin hit a new all-time high of $ 61,683 later in the month, that investment was worth a staggering $ 5.6 billion. MicroStrategy sat on paper profits of $ 3.4 billion. “
Michael Saylor was one of the youngest cryptocurrency investors to encourage other companies to invest as well. Saylor even encouraged Elon Musk to invest in the cryptocurrency space.
Tesla and MassMutual bought Bitcoin and added it to their balance sheet.
“Michael Saylor’s decision to invest in MicroStrategy’s treasury has paved the way for other corporate leaders to include Bitcoin on their balance sheets,” said Diogo Mónica, co-founder and president of crypto custodian Anchorage.
In several videos on YouTube, Michael Saylor mentioned that companies should take out a loan to buy Bitcoin. Businesses are usually of a different category from people and can usually take out a loan to fund this investment.
If a person did this, it could easily backfire.
Companies have a longer time frame to make this investment. Many people live from paycheck to paycheck with little savings. If Bitcoin crashed like it did after 2017, many people would see their investments go away.
The same would happen with MicroStrategy.
Edward Moya, a New York City-based senior market analyst for currency trading firm Oanda Corp and a Bitcoin creditor, gave his opinion on MicroStrategy.
“That would really destroy [MicroStrategy]. Whatever the few ‘buy’ reviews they have go into ‘sell’, ”says Moya. “The company would find it difficult to recover from that.”
There is always the possibility that the Bitcoin market will collapse. It is dangerous for people to follow Saylor’s advice. Some people don’t have a plan when it comes to investing. You can check out the high profile sports and movie stars who made millions and eventually went bankrupt.
If millionaires can go bankrupt because of bad investments or business, it is likely that anyone, poor or rich, can lose money.
While Michael Saylor recommends others invest in Bitcoin and take out loans to buy Bitcoin, his message does not apply to everyone. Saylor is much better positioned to make large investments and borrow money in this digital currency.
In 2017, when Bitcoin hit nearly $ 20,000, some people were making risky investments. Some people took out loans, traded bitcoin and other similar events.
Before investing in Bitcoin or any other cryptocurrency, you need an exit plan.
Ask yourself these questions:
- When do you plan to sell your cryptocurrencies?
- What do you plan to do if the cryptocurrency generates 10 or 100 times the return?
- Does your exchange offer a summary of your trades?
- When you withdraw, do you have cash to pay your taxes?
These questions are important in order for you to have an answer. If you don’t have an answer, you could face penalties from the IRS, lose your investment, or spend all of your profits.
Instead of investing, you need to have a plan for your earnings. You don’t want to be an investor who made a fortune but lost everything overnight.
It is important not to be too greedy and have an exit plan for your cryptocurrencies.