The “approval” of the Bitcoin spot ETF and the approaching Bitcoin halving may be the biggest factors.
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On November 30, US stock technology company MicroStrategy announced in an 8-K filing that from November 1 to November 29, the company and its subsidiaries purchased 16,130 Bitcoins worth approximately US$593 million, with an average price of nearly 3.6 Ten thousand U.S. dollars. This is the largest transaction since the company purchased 19,452 Bitcoins in February 2021 for just over $1 billion. (Note: Form 8-K means that when a listed company encounters major matters related to shareholders, such as major disputes, bankruptcy or takeover, it must submit an 8-K report to the US SEC instead of waiting for the next regular report)
According to the announcement, the Virginia-based company MicroStrategy currently holds a total of 174,530 Bitcoins, worth approximately $6.6 billion. MicroStrategy has spent a total of $5.28 billion on cryptocurrencies, with an average purchase price of approximately $30,252 per Bitcoin, making it by far the largest corporate holder of crypto assets.
As early as early November, during the company's earnings call, MicroStrategy founder Michael Saylor said that the approval and launch of a Bitcoin spot ETF would be a "catalytic event" for his company and other entities holding Bitcoin. benefit.
“I think we’re going to see more and more analyst coverage from traditional Wall Street banks as these ETPs (exchange-traded products) provide exposure to Bitcoin,” Michael Saylor said on the earnings call. “More The coverage means more education is popularized, thus arousing more buying interest."
While it's unclear what made MicroStrategy so bullish on Bitcoin in November, there has been plenty of news related to Bitcoin spot ETFs. Additionally, Bitcoin’s next halving is approximately five months away. Both are considered potential positive catalysts for Bitcoin price.
While MicroStrategy was preparing to submit an 8-K filing on November 28, the U.S. SEC opened a comment period for the Franklin Templeton Bitcoin Spot ETF proposal. This move was surprising because it started earlier than expected.
MicroStrategy first purchased Bitcoin in August 2020 during the COVID-19 pandemic. Soon after, a bull market ensued. Michael Saylor believes the asset provides a hedge against inflation and is the best strategy to maximize returns for shareholders because the company is sitting on a pile of cash.
Although MicroStrategy may suffer huge losses due to its purchase of Bitcoin in 2022, Michael Saylor resigned as CEO and went behind the scenes to focus on the new Bitcoin strategy. But Michael Saylor's plan appears to be working. MicroStrategy stock (Nasdaq-listed MSTR) is up 238% since the company began buying Bitcoin. The current price per share is about $493.15, up 17% in the past month.
MicroStrategy stock price fluctuates since first buying Bitcoin; Source: Bloomberg
Michael Saylor believes that buying shares of the company is a way for investors to gain exposure to cryptocurrencies. Michael Saylor has repeatedly said that Bitcoin is an asset superior to real estate and gold, and is also a "reliable store of value and attractive investment asset with greater long-term appreciation potential than holding cash." Other companies have since followed suit. The most famous is electric car company Tesla. The clean energy company led by Elon Musk, the world’s richest man, holds 9,720 BTC worth $366 million.
It is worth noting that on November 30, MicroStrategy also reached an agreement with Cowen and Company, Canaccord Genuity and BTIG to issue up to $750 million in common stock. The company initially announced plans to raise funds through a stock sale in August, saying the proceeds would be used for purchases of Bitcoin, working capital and debt repurchases, among other purposes.
