{"id":8445,"date":"2022-06-25T02:00:00","date_gmt":"2022-06-25T02:00:00","guid":{"rendered":"http:\/\/ci02a474fdd000279a"},"modified":"2025-01-28T15:20:19","modified_gmt":"2025-01-28T15:20:19","slug":"bitcoin-saylor-speculative-attack","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/markets\/bitcoin-saylor-speculative-attack","title":{"rendered":"Saylor Junior: A Bitcoin Pleb-Level Speculative Attack"},"content":{"rendered":"
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This is an opinion editorial by Mickey Koss, a West Point graduate with a degree in economics. He spent four years in the Infantry before transitioning to the Finance Corps.<\/em><\/p>\n

This article is not financial advice \u2014 just a financially illiterate psychopath doing some math. <\/em><\/p>\n

As bitcoin\u2019s price crashes, I found myself thinking about Michael Saylor and his strategic use of debt to outstack basically everyone else in the world. It got me thinking, maybe I could do something similar. A pretty standard dollar-cost averaging (DCA) is a daily buy to the tune of $20\u2013$25 a day for a pleb on a budget. <\/p>\n

The question I had is what it would look like if I were to convert a $20 daily DCA into a debt payment and bring those future sats into the present. <\/p>\n

To compare the two, I got a quote for a personal loan, getting as close to the $20 a day DCA payment as possible. The actual quote is below. <\/p>\n

<\/figure>\n

The price at the time of this writing is $22,180. Let’s assume a $25,000 bitcoin price, just to add a little conservatism into the calculation. <\/p>\n

At $25,000, a $36,000 loan will grant you 1.44 bitcoin. If you multiply the $605.26 monthly payments by the 84-month loan term, you can see that the loan will cost you $50,841.84. <\/p>\n

If we divide $50,841.84 by 1.44, we get a bitcoin price of $35,306.83 for you to break even when compared to the cost of the loan. If you think bitcoin will be above $35,000 in seven years, this seems like a pretty good deal to me. <\/p>\n

But what about the DCA? <\/p>\n

A $20 purchase at $25,000 bitcoin is 80,000 sats. If we take the 1.44 BTC above, or 144,000,000 sats, and divide it by the 80,000 sat DCA, you get 1,800. This means that at a constant price of $25,000, it would take you 1,800 days to DCA into 1.44 BTC at $20 a day, or 4.9 years. <\/p>\n

So, essentially, if bitcoin was to stay at $25,000 or below for the next five years, the $20 a day DCA strategy is mathematically better. But if you think that BTC will generally keep rising over time, it may be beneficial to convert your DCA into a loan. Even with that 10% interest rate, bitcoin would only need to exceed $35,000 at the end of the seven-year term for you to come out on top. Honestly, it seems kind of conservative to me. <\/p>\n

Michael Saylor\u2019s strategy is starting to look pretty appealing at these price levels. While I can\u2019t, in good conscience, recommend this to anybody, I thought it was an interesting micro example which sheds a little light on where Saylor\u2019s head might be. <\/p>\n

Happy stacking. I always love these fire sales. <\/p>\n

Just to reiterate one last time: Definitely do not do this. This is not financial advice.<\/em><\/p>\n

This is a guest post by Mickey Koss. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

A short look at the math behind loans might show the benefit of loans versus the classic dollar-cost average strategy.<\/p>\n","protected":false},"author":2725,"featured_media":8447,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[689,185,59,1447,2172],"class_list":{"0":"post-8445","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-debt","9":"tag-michael-saylor","10":"tag-opinion","11":"tag-plebs","12":"tag-speculative-attack"},"author_data":{"id":2725,"name":"Mickey Koss","nicename":"mickey-koss","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/2022-11-15-113031-96x96.jpg"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/img_6846.png","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/8445","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2725"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=8445"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/8445\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/8447"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=8445"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=8445"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=8445"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}