MicroStrategy reinforces its commitment to Bitcoin (BTC) with a record purchase of 615 million dollars. What is its strategy?
MicroStrategy consolidates itself as a leader in the acquisition of Bitcoin with a new million-dollar purchase. This time, it buys 14,620 BTC ahead of the possible approval of a spot BTC exchange-traded fund (ETF). This recent purchase brings MicroStrategy’s total Bitcoin holdings to 189,150 BTC. MicroStrategy therefore remains the largest public holder of Bitcoin, followed by companies such as Tesla and Marathon Digital Holdings.
MicroStrategy began purchasing Bitcoin in August 2020. Additionally, its most recent purchase prior to today’s announcement took place last month, when it acquired 16,130 Bitcoins for approximately $608 million at the time.
In fact, MicroStrategy’s foray into Bitcoin has not only generated substantial cryptocurrency gains, but has also boosted its stock performance, up 300% this year.
Particularly, MicroStrategy’s aggressive Bitcoin acquisition strategy aligns with the vision of its co-founder and prominent Bitcoin advocate, Michael Saylor, who has pointed out that “People, as they become educated about digital assets, realize that they should allocate more and more capital to this digital asset and therefore they are moving from 0.1 to 0.2%.”
MicroStrategy Strengthens its Bitcoin Position with an Unprecedented Investment
According to a US Stock Exchange Form 8-K filing, the world’s largest corporate owner of Bitcoin, based in Tysons, Virginia, spent $615.7 million on this latest acquisition. With an average price of $42,110 per unit, between November 20 and December 26, 2023.
Likewise, Michael Saylor tweeted that MicroStrategy bought Bitcoin at an average price of $42,110 per unit.
Regarding this fact, Joseph Vafi, an analyst at Canaccord Genuity, said: “Michael Saylor is something of a visionary. He saw this as an opportunity to really exploit the fact that they had a lot of cash and a pristine balance sheet and start this Bitcoin treasury experiment. And it worked well and that’s why they continue down that path.”
MicroStrategy shows no signs of slowing down when it comes to buying Bitcoin. For example, in November Saylor said he bought BTC even as the price continued to rise. Additionally, Michael Saylor has frequently touted that companies that adopt a Bitcoin strategy can thrive in times of economic turmoil.
About Bitcoin Volatility
During this month, Bitcoin volatility appears to plateau with respect to large price movements. However, if the magnifying glass is moved a little closer, it is observed that changes between $40,000 and $45,000 are extremely frequent.
This relative volatility takes over the scene and could continue for the next few days until the matter with the ETF is clarified. It should not be lost sight of that January 10 is the scheduled date for a decision on this instrument by the SEC. In any case, after that period a greater movement could be determined and the currency would leave the current carousel.
The issue of Bitcoin volatility has no major secrets looking at the approach of 2024. Consequently, the spot ETF will be decisive in knowing whether that strong volatility will be negative or positive. With this, the period of stability that marked much of the second half of 2023 could be forgotten.
It can be said that relative volatility will end. A hypothetical bull market would collapse the low volatility with respect to large moves and the high volatility with respect to small moves between 40K and 45K. At the same time, a sharp decline in the first exchange rates should not be ruled out in the event of a possible new disappointment with the ETF issue.
By Leonardo Perez
