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⚡MicroStrategy Adds $147M Bitcoin📢

Croxroad

26 Sep 2023 — 5 min read

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🙀 MicroStrategy Seizes Bitcoin Opportunity

MicroStrategy, a company that helps other businesses make smart decisions with data and is also known for investing heavily in Bitcoin, is making a positive move in the cryptocurrency market. They've just shared news about buying a significant amount of Bitcoin. This action is seen as a sign that they believe the value of Bitcoin will go up, which could influence other investors to feel more optimistic about it too. Essentially, they're expressing confidence in Bitcoin's future potential.

Michael Saylor, one of the co-founders and the executive chairman of MicroStrategy, made an announcement on X (formerly known as Twitter) on September 25. He shared that MicroStrategy has acquired 5,445 Bitcoins, and the company spent $147.3 million in cash to make this purchase. On average, they bought each Bitcoin for approximately $27,053.

MicroStrategy and its subsidiaries have officially reported, through a Form 8-K filing with the United States Securities and Exchange Commission, that they acquired this batch of Bitcoin between August 1 and September 24. This filing serves as a formal disclosure of the timeline for their cryptocurrency acquisitions.

As of September 24, MicroStrategy and its subsidiaries collectively owned about 158,245 Bitcoins. They had acquired these coins at an average purchase price of approximately $29,582 per Bitcoin, which includes fees and expenses. In total, the amount spent to acquire all of MicroStrategy's Bitcoin holdings was approximately $4.68 billion. This information was detailed in their official filing.

MicroStrategy's recent Bitcoin acquisition happened during a period when the price of Bitcoin had been relatively stable, hovering around $26,000 for several weeks. Although it briefly reached $28,000 on August 29, it declined to as low as $25,000 on September 11. Currently, at the time of writing, Bitcoin is trading at $26,081, showing a 1.9% decrease in the last 24 hours, based on data from CoinGecko. Over the past week, the cryptocurrency has seen a roughly 4% decline in its value.

MicroStrategy's most recent Bitcoin acquisition is yet another clear indication of the company's strong belief in Bitcoin's potential for growth. Just a few months earlier, in June 2023, they had purchased 12,333 Bitcoins for $347 million, with an average purchase price of approximately $29,668 per Bitcoin. This demonstrates their ongoing commitment to investing in Bitcoin as a long-term asset.

During the first quarter of 2023, MicroStrategy achieved its first profitable quarter since 2020, primarily because of a one-time income tax benefit. Impressively, the company continued its profitable streak into the following quarter, reporting a net income of $22.2 million in early August. This marks a positive turn in their financial performance.

🐈 BTC Halving Reaches 85%: HODLers Gather More Coins

Bitcoin halving is a process that's almost finished, about 85% done as of Monday. This process affects the creation of new Bitcoins. At the same time, the amount of Bitcoin held by people who have owned it for a long time (called long-term holders) is getting really high.

When this happened in the past, it often meant that the Bitcoin market was reaching a low point in its cycle and about to start a new phase of growth. So, it's a bit like a signal that things are changing for the better.

These long-term holders and how much Bitcoin they have tend to give us a good idea of where the Bitcoin market is headed. When they have a lot, Bitcoin's price often goes up, and when they have less, it can go down. It's like they have an opposite effect on Bitcoin's long-term price movement.

In this current cycle of Bitcoin halving (which is a process that happens every few years to control the creation of new Bitcoins), we're seeing something familiar. Just like in the past, as we get closer to the end of the cycle, the price of Bitcoin isn't changing much; it's staying kind of stable.

However, there are some differences this time. Two cycles ago, the price was actually going up a bit during this stable period. In the previous cycle, things were unique because there was a big drop in the market due to the COVID-19 pandemic, which created an opportunity for investors. So, even though the price wasn't moving much, there were still chances to make gains.

@therationalroot, a cryptocurrency expert, shared some interesting information. They not only kept an eye on the progress of the Bitcoin halving process but also provided a chart that shows how much Bitcoin is held by long-term investors (LTHs).

This chart tells us that right now, LTHs are holding almost as much Bitcoin as they ever have, about 76% of the total supply. In the past, when this percentage reached its peak, it meant that several months later, a Bitcoin halving event happened. After that peak, the amount of Bitcoin held by LTHs started to decrease slowly, and things stayed relatively stable until several months after the next halving. So, it's kind of like a cycle where this indicator tells us when important events in the Bitcoin world might occur.

The behavior of long-term Bitcoin holders is like a signal for what's happening in the Bitcoin market. When the price of Bitcoin is soaring during a bull market, these long-term holders start to think about selling their Bitcoin to make a profit. It's kind of like they want to cash in on the good times.

On the flip side, when the market is going down during a bear market, these long-term holders tend to keep holding onto their Bitcoin. They don't want to sell when the price is low. In fact, during these tough times, more and more people become long-term holders because they don't want to sell when the prices are falling.

Now, people are getting curious about the next Bitcoin halving, which is expected around mid-2024. Based on history, after halving, the Bitcoin market can stay relatively stable for about a year. So, don't expect any immediate big changes in Bitcoin's price right after the halving in mid-April 2024. The real effects might be felt later in 2024 and even into 2025. It's like a waiting game for things to play out in the cryptocurrency market.

🔝 Spinning Top

Think of a spinning top candlestick pattern as a shape that looks like a spinning toy. It has a short middle part (the body) with two lines sticking out from the top and bottom, and these lines are about the same length.

When you see a spinning top pattern on a price chart, it's a sign that there's uncertainty in the market. It's like the market doesn't know whether to keep going up or start going down, so it's taking a bit of a break or pause. This pattern often shows up after the price has gone up a lot or dropped a lot, as if the market is catching its breath before deciding what to do next. It's a way to visualize a moment of indecision among traders.