Author: Koala Kaola Finance
The crypto community is excited because after a long 28 months, Bitcoin has once again reached a new all-time high.
Not surprisingly, many "Bitcoin surge" analyzes in the industry will focus on macro factors such as halving and interest rate cuts, but Koala Finance believes that this market rise may be related to a "micro" company, which is - Micro Strategy MicroStrategy, let’s take a deep dive in this article.
The day before the surge, it announced to raise US$600 million to increase its holdings of Bitcoin. Why does MicroStrategy always seize the opportunity accurately?
In fact, just before Bitcoin surged on the evening of March 5, MicroStrategy "suddenly" issued an announcement announcing plans to sell 2030 shares with a total principal amount of US$600 million to qualified institutional buyers through private placements based on market conditions and other factors. convertible senior notes. MicroStrategy also expects to grant to the initial purchasers of the notes an option to purchase up to an additional $90,000,000 in the aggregate principal amount of the notes for a period of 13 days beginning on and including the date when the notes are first issued.
MicroStrategy is an American business intelligence software company whose CEO Michael Saylor is a staunch supporter of Bitcoin. Since August 2020, MicroStrategy has converted the majority of its balance sheet to Bitcoin and has now become One of the largest Bitcoin holders in the world.
There are several main reasons why MicroStrategy can so accurately grasp the timing of Bitcoin price increases:
- MicroStrategy is optimistic about Bitcoin in the long term: Michael Saylor believes that Bitcoin is the best candidate for the future global reserve currency and regards it as an investment tool to fight inflation. Therefore, MicroStrategy has been committed to holding Bitcoin for the long term and will not change its investment strategy due to short-term price fluctuations.
- Keen insight into market sentiment: MicroStrategy has been paying close attention to the Bitcoin market and is able to accurately judge changes in market sentiment. Prior to the announcement on March 4, 2024, Bitcoin prices had been rising for several weeks and market sentiment was at a high. MicroStrategy chose this time to announce its fundraising to increase its holdings of Bitcoin, which is undoubtedly the best time to seize market sentiment.
- Strong financial strength: MicroStrategy is a highly profitable company with sufficient financial strength. This allows MicroStrategy to raise large amounts of funds in a short period of time and quickly convert them into Bitcoin.
Not only that, as the price of Bitcoin rose, MicroStrategy's stock price also exceeded US$1,300 and is now trading at US$1,341.38, with an intraday increase of 24.27% and a year-to-date increase of 105.25%. Market analysts believe that if this trend is followed, MicroStrategy is expected to hit its highest closing price since March 2000 (when its stock price reached $2,267.50). However, its current stock price is still lower than the historical closing high of $3,130.00 on March 10, 2000. There is a gap of nearly 60%.
Of course, MicroStrategy's investment strategy also carries certain risks. If the price of Bitcoin were to decline significantly, MicroStrategy would suffer significant losses in the value of its assets.
However, from the current point of view, MicroStrategy’s investment strategy seems to be successful. Since August 2020, the value of Bitcoin held by MicroStrategy has increased several times, bringing generous returns to the company’s shareholders. It is reported that MicroStrategy Chairman Michael Saylor, MicroStrategy's largest investor, owns about 12% of the company's shares. He also revealed that he personally owned 17,732 Bitcoins in 2020, so his holdings and positions climbed to $2.96 billion from $2.27 billion at the beginning of the week.
Can MicroStrategy drive crypto whale to invest in Bitcoin?
Koala Finance has learned that MicroStrategy currently holds a total of approximately 193,000 BTC, far exceeding the Bitcoin holdings of other listed companies. Its average purchase price is 31,544 USDT per coin. Calculated based on US$69,000, the floating profit exceeds US$7 billion. .
Market analysts believe that driven by MicroStrategy, it may "stimulate" more crypto whale to enter the market. For example, shortly after it announced that it would continue to purchase Bitcoin, HODL15Capital noticed the buying action of a mysterious whale. . Since each increase in position is about 100 BTC, the mysterious address is also named Mr. 100. After recent frequent increase in positions, this address has held a total of approximately 51,064 BTC, worth approximately US$3.5 billion.
As a large institutional investor, MicroStrategy’s continued optimism about Bitcoin may have an impact on other crypto whale. Its investment strategy also demonstrates its confidence in the long-term value of Bitcoin, which may encourage other crypto whale to continue holding on. Having or increasing their holdings of Bitcoin, coupled with MicroStrategy’s successful investment, may attract other crypto whale to follow suit, which may also lead to further increases in the price of Bitcoin.
Summarize
At this stage, most institutions continue to be optimistic about the long-term growth trend of BTC, but some practitioners are also warning of potential callback risks. As BTC reaches a new all-time high, the question that investors are most concerned about right now is undoubtedly whether BTC can stand firm here and continue its upward trend. Let us wait and see.
