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⚡MicroStrategy's Strategic Bet♟️

Croxroad

28 Dec 2023 — 4 min read

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⏫ MicroStrategy Doubles Down on Bitcoin

MicroStrategy, a software firm, made a significant move by investing approximately $615.7 million in bitcoin, acquiring around 14,620 bitcoins between Nov. 30 and Dec. 26. This strategic decision comes at a time of heightened anticipation for the approval of a spot bitcoin exchange-traded fund (ETF) by the top U.S. markets regulator. The company's stock experienced an 8% surge in afternoon trading, contributing to MicroStrategy's staggering 350% surge in value this year, closely mirroring bitcoin's impressive 160% gain. This move underscores the company's commitment to bitcoin as a key component of its long-term investment strategy.

The analysts at TD Cowen emphasised that MicroStrategy's move is not driven by short-term trading goals but rather reflects a strong belief in bitcoin's potential as a superior store of value. The company's stock has become increasingly attractive to investors seeking exposure to bitcoin, as its value tends to move in tandem with the digital asset. MicroStrategy's approach to using bitcoin as a safeguard for the value of its reserve assets has added to the appeal of its stock, reinforcing the notion that the investment is more than just a financial move but a long-term bet on the resilience and appreciation of bitcoin.

MicroStrategy, which initiated its bitcoin purchases in 2020, now holds a substantial 189,150 bitcoins, acquired at a total cost of about $5.9 billion. The company remains steadfast in its strategy, emphasising that these bitcoin holdings are intended for the long term. In its latest quarterly report, MicroStrategy highlighted bitcoin's limited supply as a key factor offering potential appreciation in value, especially if its adoption increases. The company sees bitcoin not only as an investment opportunity but also as a hedge against inflation over the long haul.

🤥 SEC Nod Fuels Bitcoin FOMO

As we approach the New Year, the Bitcoin market seems subdued as investors eagerly await the potential approval of spot Bitcoin exchange-traded funds (ETFs) in the US scheduled for January. Despite reaching nearly $45,000 in December, Bitcoin experienced a correction, testing support around $40,000. The market has been caught in a tug-of-war between bears and bulls, causing Bitcoin to fluctuate between resistance at $45,000 and support at $40,000. The anticipation of ETF approval has created a sense of indecision, but a breakthrough above resistance could trigger a FOMO-driven rally, potentially propelling the price above $50,000.

Analysing the current state, Bitcoin appears to be in bullish territory, supported by an ascending trendline forming a bullish triangle. The ongoing consolidation within this pattern suggests a positive outlook, with at least four bounces off the support line potentially signalling a resumption of the uptrend. Traders are advised to consider entering long positions strategically, overcoming immediate resistance at $43,000 marked by the 50 Exponential Moving Average (EMA) and the 20 EMA. The Relative Strength Index (RSI) supports the bullish scenario, recovering from near oversold conditions, although facing some resistance around 50. Additionally, the potential cross of the blue MACD line above the red signal line signals a short-term bullish trend.

Notably, blockchain data indicates that Bitcoin holders are accumulating the cryptocurrency despite the price consolidation. Analysts suggest historical patterns and four-year cycles linked to Bitcoin halving, indicating that the recent dip may be ending, with the bottoming out candle signalling a potential upswing. Investors who bought at $41,500 are already in profit, and a breakthrough above the $45,000 resistance level could swiftly propel Bitcoin beyond $50,000.

👑 Is it Possible to Buy or Send Less than one Bitcoin?

Bitcoin is divisible into eight decimal places, and the smallest unit is known as one Satoshi, equivalent to 0.00000001 Bitcoin. This allows for flexibility in transactions, enabling users to send precisely the amount they require, whether it's a substantial sum or a minute fraction of a Bitcoin. The divisibility of Bitcoin into Satoshis enhances its usability, providing a scalable and versatile means of conducting transactions on the blockchain.