MicroStrategy, the data analytics company run by former billionaire bitcoin advocate Michael Saylor, has revealed its first batch of bitcoin purchases since the market crash began. crypto-currencies over the past two months, revealing that it has once again doubled down on its commitment to the world’s largest cryptocurrency, despite investors worrying about its position amid steep price drops .
Michael Saylor, President and CEO of MicroStrategy, during a panel discussion at the Bitcoin… [+] conference in Miami Beach.
In a regulatory filing on Thursday, Virginia-based MicroStrategy, which owns more bitcoins than any other company in the world, disclosed that it purchased about 480 bitcoins for $10 million in cash, or $20,817 per coin, between May 3 and Tuesday. On the same subject : Crypto.com Announces MIT Fintech Sponsorship This Year.
The company, which began buying cryptocurrencies for its balance sheet in August 2020, claims to hold around 129,699 bitcoins today, bought for almost $4 billion, or an average price of $30,664 per coin – this which means that the company’s investment has generated a loss of around 33% so far.
MicroStrategy’s latest acquisition comes as bitcoin struggles to recoup its losses since crashing 70% from a peak of over $69,000 in November. Concerns about job cuts in the sector, the potential insolvency of major societyCryptocurrency s and the Federal Reserve’s economic tightening measures pushed prices to their lowest level in 18 months, below $20,000, at the start of the month.
MicroStrategy has previously used the proceeds from stock and debt sales to buy bitcoin, and in March the company took out a $205 million cryptocurrency-backed loan to fund additional purchases.
Bitcoin’s latest plunge sparked speculation earlier this month that MicroStrategy would be forced to liquidate some of its bitcoin holdings to cover the losses, but Saylor dismissed those concerns, saying on CNBC that the price of bitcoin should drop below $3,500 before further collateral is needed.
Shares of MicroStrategy, which have soared 800% to $1,030 during the pandemic, have fallen 79% since bitcoin peaked in November, and were down another 6% on Wednesday morning to $175.
Bitcoin, which was trading at around $20,090 on Wednesday morning, is down 1% in the past 24 hours and nearly 32% in the past month, but is still showing a staggering 115% rise in over the past two years. See also: Why Are Riot Blockchain, BIT Mining and Coinbase Stocks Falling This Week?.
“We feel like we have a fortress record,” Saylor said on CNBC’s Squawk Box earlier this month. See the article: Can the Polkadot crypto hit $100 soon?. “We are comfortable and the margin charge is well managed”.
MicroStrategy stock has crashed nearly 40% this month following media and social media reports of a potential margin call, says BTIG analyst Mark Palmer in a recent note. to customers. “The case has been overblown,” he claimed, noting that the company holds almost 100,000 bitcoins – worth around $2 billion – which it can use as additional collateral to avoid a risk. margin call. Yet others remain pessimistic about this strategy. “If they don’t improve the basic operations of the software business, they can’t keep buying more bitcoin,” Jefferies analyst Brent Thill told investors in a note this month, noting that the company’s software business has lost market share to giants like Microsoft as its bitcoin investment wanes in value. “You have a bitcoin investment strategy that is clearly not working for the business financially.”
Boosted by government stimulus efforts and institutional adoption, the cryptocurrency market briefly surpassed the all-time high of $3 trillion last year, but the growing downtrend sent the value plummeting. below $900 billion this month, about half since early May. In the latest sign of nascent market turmoil, Singapore-based digital asset hedge fund Three Arrows Capital (3AC), which at one point claimed to hold over $18 billion in assets, has gone insolvent , prompting a court in the British Virgin Islands to order the liquidation of his assets, Sky News reported on Wednesday. On Monday, cryptocurrency broker Voyager Digital said it had issued a notice of default against 3AC after it failed to make payments on a roughly $675 million loan. .
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