The world's largest holder of Bitcoin, MicroStrategy, accumulated 5,262 units to raise its total holdings to over $42 billion as prices sharply declined last week.
MicroStrategy announced it purchased 5,262 Bitcoin (BTC) for a total of $561 million last week. Thus, the total holdings of this 'whale' have been raised to 444,262 BTC, equivalent to $42.2 billion.
Executive Chairman Michael Saylor stated that the average price of this transaction is $106,622 per coin. If considering the total Bitcoin holdings they have, the average cost is $62,257 per unit.
This information was released on the same day MicroStrategy began trading as a member of the Nasdaq 100 stock index. The stock price remained relatively unchanged at over $364.2.
MicroStrategy was founded 35 years ago and has mostly operated in the software sector. Last year, the company's stock increased by 337%, ranking among the strongest in the U.S. among companies with a market capitalization of over $5 billion. This increase was even greater than that of Nvidia and Meta, thanks to its Bitcoin reserve strategy.
This company began buying BTC in mid-2020, betting that this cryptocurrency would help them survive in a fiercely competitive period. To date, about 90% of the company's value is related to the amount of Bitcoin they hold.
"This 'whale' is accumulating more assets amid the backdrop of a volatile week for BTC. From a record high of over $108,268 on December 17, the largest cryptocurrency in the world lost momentum and gradually retreated to lower price ranges. By the end of the week, the coin had at one point dropped close to $92,000, representing a 10% loss in just one day.
In total for the week, the market price lost 8.8% - the deepest level since August. Since then, BTC has improved but remains below the $100,000 mark.
The crash of Bitcoin occurred after the market recorded a strong profit-taking phenomenon from the 'shark' investor group when the Federal Reserve (Fed) stated that it does not want to hold or collaborate to build a cryptocurrency reserve and may slow down on monetary easing next year. On one hand, experts believe that this move helps eliminate excessive speculation in the market. However, long-term investors still worry that worse things could happen.
Andre Dragosch, Head of European Research at Bitwise, who has accurately predicted BTC prices for several months, has become cautious and warned of deeper losses in the coming weeks.
This expert said it is very likely that "more pain will be recorded" as the Fed shows signs of leaning towards restricting policy easing. At the same time, U.S. Treasury yields have risen, signaling higher borrowing costs and the relative appeal of fixed-income investments. This often leads to a withdrawal flow from riskier assets such as cryptocurrencies and stocks. A stronger USD also makes dollar-based assets more expensive, discouraging capital inflows.
However, Dragosch also believes this could be an "interesting buying opportunity" due to the fact that the market is currently experiencing a supply shortage. The drop of Bitcoin to the $90,000 range is assessed by expert Alex Kuptsikevich from FxPro as potentially providing a new opportunity for market traders.
In a potentially shocking scenario presented by this expert, BTC could suddenly drop to the $70,000 area. However, it is more likely that there will be a drop to $90,000 in the coming weeks, which would be attractive enough for buyers to jump in and prevent a sell-off.
"The market continues to digest the Fed's tougher tone, but will be bolstered by the urge to accumulate cryptocurrencies for profit after a year of strong Bitcoin growth," Kuptsikevich said.
(according to CoinDesk)