The company, managed by Bitcoin maximalist Michael Saylor, is once again taking advantage of the cryptocurrency’s low valuations and increasing its position. In the meantime, however, it has made its first sales.
2500 BTC more
According to a tweet that Michael Saylor posted on December 28, MicroStrategy has purchased another 2,500 BTC. The stock increased over a period of time falling between November 1 and December 21, 2022.
Thus, the company became the holder of a total of 132,500 BTC, with a total market value of $4.03 billion. The average purchase price per coin was $30,397.
Interestingly, meanwhile, MicroStrategy did something that Saylor said was never supposed to happen. On December 22, the company sold 704 BTC. The value of the transaction was $11.8 million. The procedure was a realization of a loss and was certainly intended to optimize taxation, before the year’s close. In turn, on December 24, 810 coins were purchased again, for about $13.6 million.
Waiting for MicroStrategy’s position to be liquidated
MicroStrategy is a publicly traded company that, of all those listed on the traditional trading floor, has the largest BTC holdings. Thus, this puts it in a strong correlation with the cryptocurrency market, with Bitcoin at the forefront. Given the way it raises funds to buy Bitcoin, many market analysts see Michael Saylor’s company as a potential next black swan. Recall that MicroStrategy, in order to make cryptocurrency purchases, issues bonds. These, in turn, have a predetermined maturity date. Bonds are debt that, along with the set date, must be repurchased. Failure to do so will mean insolvency and the need to liquidate the assets held, in order to meet the obligation later.
This is a far different type of potential liquidation than is the case with leveraged investing. Nonetheless, many observers recognize that in this case, MicroStrategy may be forced by its investors, to strengthen its position similarly to what happens in the case of margining. So is the company in danger, and with it the entire cryptocurrency market?
MicroStrategy’s chart answers
Given the bold market movements that have been recent purchases, it might seem that MicroStrategy’s position is safe. However, this is not reflected in the company’s chart. Its shares are down more than 89% from the local peak reached in 2021. It was far from ATH, but was recorded in an era when the company was already present in the cryptocurrency market. News of recent BTC purchases, on the other hand, was met with a chilly reception. MSTR’s shares, a few hours after the news was released, are trading down 3.65%.