Saylor’s micro-strategy bought another $ 10 million in Bitcoin as crypto markets lost $ 900 billion in value

by James · July 5, 2022

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MicroStrategy, the data analytics firm led by solid bitcoin bull and former billionaire Michael Saylor, unveiled its first group of bitcoin purchases since the beginning of the cryptocurrency market’s intense sales in the past two months, revealing its commitment to the world’s largest cryptocurrency to despite investor concerns about its position in the midst of the sharp fall in prices.

Michael Saylor, Chairman and CEO of MicroStrategy, during a panel discussion on Bitcoin … [+] Conference in Miami Beach.

BELONGED TO THE PRESS

Keywords

In a regulatory filing Thursday, Virginia-based MicroStrategy, which owns more bitcoin than any other company in the world, revealed that it bought about 480 bitcoins for $ 10 million in cash, or $ 20,817 per coin, between May 3 and Tuesday.

The company, which began buying cryptocurrency for its balance sheet in August 2020, says it now has about 129,699 bitcoins, bought for almost $ 4 billion, or an average price of $ 30,664 per coin – suggesting that the company’s investment has yielded a loss of about 33 %. far.

MicroStrategy’s latest acquisition comes as bitcoin struggles to recover losses since crashing 70% from a high above $ 69,000 in November, with concerns about downsizing in the industry, potential insolvency of major crypto companies and the Federal Reserve’s economic tightening measures pushing prices to 18- month below $ 20,000 earlier this month.

MicroStrategy has previously used debt and stock sales to buy bitcoin, and in March the company took out a $ 205 million loan backed by the cryptocurrency to finance further purchases.

Bitcoin’s latest sale led to speculation earlier this month that MicroStrategy would be forced to liquidate some of its bitcoin holdings to cover losses, but Saylor dismissed the concerns as “a lot of fuss about nothing” on CNBC, claiming that the price of bitcoin had to fall below $ 3,500. before additional security is required.

Shares in MicroStrategy, which at one point shot 800% to $ 1,030 during the pandemic, have plummeted 79% since the peak of bitcoin in November, and fell another 6% Wednesday morning to $ 175.

Surprising fact

Bitcoin, which traded at around $ 20,090 on Wednesday morning, has fallen 1% in the last 24 hours and almost 32% in the last month, but it is still up a staggering 115% in the last two years.

Versus

“We feel like we have a fortress balance,” Saylor told CNBC Squawk Box earlier this month. “We are comfortable and the margin load is well managed.”

Key background

MicroStrategy shares collapsed nearly 40% this month as media coverage and social media went “abums” over a potential margin call, BTIG analyst Mark Palmer explained in a recent note to customers. “The case has been blown out of proportion,” he claimed, adding that the company has nearly 100,000 bitcoins – worth about $ 2 billion – available to provide extra security to avoid a margin. Still, others are still bearish on the strategy. “If they do not improve the core business of the software business, they can not continue to buy more bitcoin,” Jefferies analyst Brent Thill told investors in a note this month, pointing out that the company’s software business has lost market share to the giants. like Microsoft as the bitcoin investment loses value. “You have an investment strategy in bitcoin that clearly does not work for the company financially.”

Tangent

Reinforced by government stimulus efforts and institutional adoption, the cryptocurrency market briefly exceeded a record high of $ 3 trillion last year, but rising bearishness has pushed the value below $ 900 billion this month, roughly halved since early May. In the latest signs of turmoil for the emerging market, Singapore-based digital hedge fund Three Arrows Capital (3AC), which at one time claimed to have more than $ 18 billion in assets, has become insolvent – leading to A court in the British Virgin Islands has ordered that the assets be liquidated, Sky News reported on Wednesday. On Monday, cryptocurrency broker Voyager Digital said it issued a default notice to 3AC when it failed to make payments on a loan of around $ 675 million.