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Microstrategy Doubles Down On Bitcoin As Michael Saylor Continues Bring Bullish

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Bitcoin’s burgeoning reputation has been helped along by price fluctuations and changes in the cryptocurrency’s market cap. Despite the latest bear trends, proponents of the cryptocurrency believe that Bitcoin will be the currency of the future. Microstrategy, the popular business intelligence and mobile software firm claimed on Friday that they will be adding more Bitcoin to their roster. 

The company’s stance on the world’s largest cryptocurrency comes on the back of reports suggesting losses incurred by Microstrategy. This loss was spread across sectors and according to CEO Michael Saylor, the asset class would only help in revitalizing the market. The report also said:

“We continue to be pleased by the results of the implementation of our digital asset strategy. Our latest capital raise allowed us to expand our digital holdings, which now exceed 105,000 bitcoins. Going forward, we intend to continue to deploy additional capital into our digital asset strategy.”

2021 is turning out to be a great year for the company as second-quarter gross profits cross the $100 million mark. Microstrategy’s latest report further touched on the company’s total BTC holdings. According to sources, Microstrategy had amassed 105,085 BTC with cumulative impairment losses of $690 million. A subsidiary of the parent company, Micrtostrategy LLC holds approx. 92,079 BTC. 

As of now, Saylor and Microstrategy look to be putting their faith in Bitcoin’s functionalities. The BTC proponent even reiterated recently that if the price of Bitcoin was lower four years later than it is now, he would consider his cryptocurrency strategy. Other players in the market praised Microstratagey’s bullish nature and urged them to keep up the good work. 

MicroStrategy stock price rallies after reports of Capital International buying $600M emerge

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Microstrategy has welcomed significant investment from the financial services company Capital International. According to the business intelligence firm’s filings to the US Securities and Exchange Commission [SEC], the investors of Capital International have acquired a large equity stake.

The filing also revealed that the investors of the company had reportedly bought 953,242 shares of MicroStrategy’s stock. Shortly after the report of the filing with the regulatory watchdog of the country, MicroStrategy’s stock price noted a surge of 1.7% on Friday and increased roughly to $630. With this, Capital International’s shares worth totaled $600 million. On the other hand, the SEC filing by Capital International for the first quarter of the year had no mention of the firm owning any shares of MicroStrategy as of the 31st of March.

MicroStrategy’s Ambitious Roadmap

The latest development comes a month after MicroStrategy disclosed its intentions to raise a $400 million aggregate principal amount of 6.125% due 2028 in a private offering to qualified institutional buyers to buy more Bitcoin [BTC]. MicroStrategy’s stock fell even after it increased the debt offering to $500 million and reportedly purchased almost $489 million in the crypto asset.

The company is among one of the earliest corporate backers of the world’s flagship crypto asset. Back in August last year, it had revealed using existing cash on its balance sheet to acquire Bitcoin and since then, it has bought several dip. Michael Saylor, the CEO of the business intelligence firm has been quite vocal about his stance on Bitcoin. He happens to be one of the most prominent BTC bulls and over the past couple of months, announced purchasing millions of dollars of the crypto-asset.

He had had noted,

“Bitcoin [BTC] is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy.”

MicroStrategy announces Bitcoin purchase from $500M bond sale

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MicroStrategy, the software company has revealed that the conclusion of its $500 million offerings of secured notes on the 14th of June. It also disclosed its intention to use the proceeds, which is around $488 million to purchase more Bitcoin [after taking into consideration, the discounts, commissions, and expenses].

The latest development comes a week after MicroStrategy had announced this latest offering. Originally, the firm had planned to secure $400 million, however, it was later amplified to $500 million. The official press release on the same read,

“The aggregate principal amount of the notes sold in the offering was $500 million and the notes bear interest at an annual rate of 6.125%. The notes were sold in a private offering to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to persons outside of the United States in compliance with Regulation S under the Securities Act.”

The firm currently holds more than 92K BTC, which is under the purview of its newly formed subsidiary MicroStrategy. In short, it owns more bitcoin than any other organization in the world, and hence the latest news suggests a promising sentiment about the crypto-assets future despite undergoing a series of corrections this quarter.

MicroStrategy may sell almost $1 billion in stock

On the same day, the company also announced the launch of “at the market” securities offering via an S-3 filing for the US Securities and Exchange Commission [SEC]. According to the official document, this offering is likely to enable a sell up to $1 billion of its Class A Common stock over time. The filing also revealed that the proceeds from it would be directed for general corporate purposes, including the acquisition of Bitcoin.

The news follows at the backdrop of Bitcoin’s price appreciating above the psychological level of $40k as the week dawned.

Binance Announces Stock Tokens For Microstrategy, Apple, Microsoft

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Cryptocurrency exchange, Binance announced support for three stock tokens of industry behemoths – Microstrategy [MSTR], Apple [AAPL], and Microsoft [MSFT] today.

The stock token for business intelligence company, Microstrategy [MSTR/BUSD] will be listed on the 26th of April while that of American multinational tech firms Apple [AAPL/BUSD] and Microsoft [MSFT/BUSD] will be made available on the 28th and 30th of April respectively.

The stock tokens on Binance’s platform are shares of public companies that trade on traditional stock exchanges. The Malta-based cryptocurrency exchange had previously detailed that each Stock Token represents one ordinary share of the relevant stock which is completely backed by a depository portfolio of underlying securities maintained by its partner CM-Equity AG, Germany who are tasked with monitoring all trading activity for compliance.

Binance competitors such as FTX as well as Bittrex Global also offers trading in stock tokens through CM-Equity.

The Founder and CEO of the platform, Changpeng ‘CZ’ Zhao had recently asserted that the latest move was the indication of seamless democratization of value transfer by reducing friction and costs to accessibility, without bargaining on factors such as compliance or security.

The latest development comes around two weeks after Binance announced venturing into the space of tokenized stock trading with the listing of Tesla stock tokens, which allowed the exchange’s users to buy Tesla tokens representing its shares.

Binance’s Stock Token Raises Red Flag

Binance had come under the scrutiny of the European watchdogs including the UK’s Financial Conduct Authority [FCA] for its stock token offering that was launched earlier this month. According to reports, the regulators were now probing whether it adhered to security rules before rolling out.

The UK’s Financial Conduct Authority was quoted saying to the Financial Times that it was working with Binance to examine the product, “the regulations that may apply to it and how it is marketed”. It also went on to add that,

“..firms and their senior management teams are responsible for determining whether their products and services fall within the remit of the FCA.”

MicroStrategy Acquires Another $15M Worth of Bitcoin

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The business intelligence firm, MicroStrategy just bought an additional $15 million worth of Bitcoin. According to the tweet by the firm’s CEO Michael Saylor, approximately 253 BTC for $15 million in cash at an average price of nearly $59,339 per Bitcoin.

With the latest purchase, MicroStrategy reportedly holds nearly 91,579 BTC that were acquired for almost $2.226 billion which was at an average cost of $24,311 per Bitcoin, as of 5th April. Since the Nasdaq-listed firm’s first bet, it has remained incredibly bullish on the crypto-asset and has made several purchases over the last few months.

Bitcoin’s meteoric rise was accompanied by an avalanche of institutional involvement and mainstream embrace which has continued even as the crypto-asset was stuck below the coveted $60,000-mark. MicroStrategy, for one, became the first publicly-traded company that, according to Saylor, made a “material investment”. Following its suit was the Jack Dorsey-led financial services and digital payments company, Square then California-based car manufacturing giant Tesla followed.

Over the course of the last financial year, several global corporations, for instance, BNY Mellon, Goldman Sachs, Visa, BlackRock, MasterCard, and PayPal have championed the cryptocurrency that was once touted as a bubble. Owing to this embrace and the rising institutional demand, Bitcoin managed to deliver an astonishing return of more than 800% during the financial year 2020-21.

Not Everyone Sides With MicroStrategy’s “Gamble” On Bitcoin

However, the latest high-profile Bitcoin buying spree by MicroStrategy did not sit well with a lot of traders who consider the foray of big players will lead to centralization. The concerns do not end there. Michael Saylor’s bid to diversify the portfolio of his company originated from the argument of a potential devaluation of the US currency.

But according to Marc Lichtenfeld, chief income strategist at The Oxford Group, the bitcoin acquisition strategy adopted by MicroStrategy is an “irresponsible” move. On that note, Lichtenfeld has earlier clarified,

“I think MicroStrategy is being completely irresponsible with shareholders’ capital by putting so much of their assets into a very speculative and volatile asset,” Lichtenfeld said in an interview with the Washington Business Journal. “I have never seen a company do this. This is beyond the excesses I have seen during the dot-com boom, and I think it makes them very, very vulnerable.”

JPMorgan Files With SEC To Launch Debt Linked To 11 Cryptocurrency-focused Firms

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Wall Street investment banking company, JPMorgan Chase is set to roll-out debt instruments that are connected to 11 cryptocurrency-focused companies. In the latest development, the financial services behemoth has reportedly filed with the US Securities and Exchange Commission [SEC] about a new debt instrument to enable its investor clients to gain exposure to the cryptocurrency market in the form of public-company stocks involved with digital assets.

The latest stint happens to be JPMorgan’s first-ever material mention of Bitcoin. This comes as a surprise welcome as Jamie Dimon, the CEO of the bank has not been a fan of Bitcoin and had also called the crypto-asset a “fraud”.

The prosepectus read,

“The notes are designed for investors who seek exposure to the performance of the J.P. Morgan Cryptocurrency Exposure Basket (Mar 2021) of 11 unequally weighted Reference Stocks, which we refer to as the Basket, as reduced by the Basket Deduction of 1.50%. Notwithstanding the name of the Basket, the notes do not provide direct exposure to cryptocurrencies and the performance of the Basket may not be correlated with the price of any particular cryptocurrency, such as bitcoin.”

According to the documentation details on the official edict, JPMorgan’s Cryptocurrency Exposure Basket (Mar 2021) is described as an “unequally weighted basket consisting of 11 Reference Stocks of U.S.-listed companies” that operate businesses directly and indirectly related to cryptocurrencies

JPMorgan’s Crypto Exposure Basket Also Features MicroStrategy, PayPal among others

The upcoming debt instrument was a major development in the cryptocurrency space. Perfectly timed with the market-wide bullish reversal, JPMorgan’s news suggests that sentiment of the previously skeptic Wall Street biggies as cryptocurrency quietly appeared atop the chart surpassing stocks to bonds, oil, banks, gold, and tech stocks.

Also, it was the inclusion of some of the big names in the industry that was interesting. JPMorgan’s “basket” of companies include enterprise software and Bitcoin holder, MicroStrategy, payments companies including PayPal.

Other companies also include Jack Dorsey-led Square, Riot Blockchain, NVIDIA, AMD, semiconductor giant TSMC, Intercontinental Exchange, CME Group, Overstock and Silvergate. This “basket” is tasked with developing support for cryptocurrency into its app.

The Motley Fool Is Not A Bitcoin Sceptic Anymore

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The financial and investment advisory giant The Motley Fool revealed that it is all set to add $5 million of Bitcoin to its own balance sheet as part of its real-money 10X portfolio.

According to the announcement on the 18th of Feb, it also plans to hold the cryptocurrency purchase for several years.

In a series of tweets, the firm asserted that it believes Bitcoin would store value more effectively than gold over the long term. It opined that Bitcoin might become a medium of transactions when its “price stabilizes in a decade”.

Motley also said that it could be a productive hedge against inflation.

The Motley Fool’s tweet read,

“Since we’re focused on the long-term opportunity, we don’t worry much about the volatility in the short term. We plan to hold this Bitcoin investment for many years and we’ll wait for all of our members in our new 10X service to be able to buy before we do.”

The firm had previously confirmed that it won’t be buying “overpriced ETFs” but will be “buying Bitcoin directly”. Not just that, it also asked its readers to buy the cryptocurrency.

The Motley Fool Was Not always a Big Fan of Bitcoin

It has been critical of Bitcoin and the cryptocurrency industry by extension.

The latest news comes as institutions continued to pour capital into space. Firms such as Tesla and MicroStrategy have also upped their game by making multi-million dollar Bitcoin investments in the recent weeks.

And the move by The Motley Fool is crucial because the firm happens to be one of the most popular financial advice companies that have been in operation since 1993.

It can safely said that Bitcoin continues to win over more corporate endorsements.

These are signs of a widening embrace across the financial services industry that has managed to send the flagship cryptocurrency to new heights even as it still remains lightly regulated and controversial among policymakers.

Bitcoin’s Pullback Slashes Over 23% From Michael Saylor’s Microstrategy

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Microstrategy, which happens to be the crypto bull Michael Saylor’s business intelligence firm, and Bitcoin’s price appeared to be intertwined. Here’s what happened yesterday:

Shares of MicroStrategy retraced significantly on the 10th of February. This came right after a fresh sell-off sparked in the price of Bitcoin which fell by more than 7% from its all-time high.

The cryptocurrency market-wide downturn apparently hurt Microstrategy’s stock which fell by more than 23% and went on to become one of the worst assets in the last 24-hours.

Interestingly, Saylor’s company has seen a meteoric rise of more than 700% in share prices during the past six months in tandem with Bitcoin’s price movement which was found to be raging bulls for the past several months now.

Why is this important?

It is without a doubt that Saylor has been at the forefront of the institutional adoption of Bitcoin. It all started in mid-2020 when Microstrategy acquired the majority of its Bitcoin at prices well below the current levels. Since then, it has almost tripled its investment in a short span of time.

Moreover, Microstrategy’s policy is to convert any cash that is not immediately required for operations into Bitcoin. If its latest update is to be taken into account, the firm reportedly had 71,079 Bitcoin tokens. Despite the value of the holdings going down following the correction, the business intelligence firm’s holdings are still worth well over $3 billion.

To top that, Microstrategy’s market cap is nearly $10 billion. Meaning that one-third of the company’s total value originates from none other than its Bitcoin holding. This explains why the shares took a double-digit plunge mimicking BTC’s price action.

Saylor’ optimism

The exec is not yet done with promoting Bitcoin. So much so, that just before the crash, Saylor reportedly unveiled a new online course about Bitcoin.

He also asserted that there will soon be an ‘avalanche’ of companies buying the crypto-asset. Saylor was also quoted saying,

“The pitch is Bitcoin is digital gold, and it’s sitting on the world’s first digital monetary network,”

Bitcoin Nears $31k But There’s Room For Further Growth

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Bitcoin’s price has crumbled to $31,935 at the time of writing after sustaining a weekly loss of nearly 14%. Despite the growing bearish cloud over the crypto-asset’s price, all hope’s not lost.

This was according to the latest report by the blockchain intelligence platform, Glassnode which stated that Bitcoin has more room for further growth.

Bitcoin Investors Unwilling to Sell at a Profit

According to Glassnode, Bitcoin’s aSOPR [Adjusted SOPR] has reset after maintaining a steady upward slope for the past several months. Despite having a rather tumultuous week, this metric indicated that coins moving between investors per hour [24h MA] are, on average, no longer being sold at a profit.

It further stated,

“In order for SOPR to go lower, investors would have to be willing to sell at a loss, which is unlikely given the current shape of the market.”

Bitcoin 1
Bitcoin Nears $31k But There's Room For Further Growth 3

This comes after the aSOPR took a sharp fall last week which preceded subsequent market correction in the price of the crypto-asset. Typically, SOPR swings near 1. During the bull run, the aSOPR rushed above 1.15 before plunging to levels last seen in September 2020.

As the metric reset and bounced back from 1, the above chart suggested that the current downward trend could possibly diminish in the near future.

Furthermore, 12.6% of the BTC supply which totals 2.3 million BTC was moved above $30,000. Glassnode stated,

“This is substantial, given that $BTC crossed $30k just this year. It suggests investors are injecting capital, and therefore confidence in further price appreciation.”

Whales Playing the Long Game

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Bitcoin Nears $31k But There's Room For Further Growth 4

Bitcoin’s declines have had no effect on the whales. This was evidenced as the number of large volume holders of the crypto-asset with 1,000 or more coins, saw a consistent uptrend. Nearly 190 new whales have been created since the start of the year.

Notably, the recent drop in the coin’s price has further bolstered the metric. On further breaking down the quick successions in which the whales were scooping up the coins, it was found that the figures for Bitcoin whales had jumped in substantially after the market suffered a loss on the 10th of January this year.

More recently, Microstrategy announced accumulating after the drop on the 22nd of January. The Nasdaq-listed multibillion-dollar company revealed that it had purchased 314 more bitcoins for $10 million in cash.