MicroStrategy Buys The Dip With Another $10M In Bitcoin

Key Insights:

• Michael Saylor’s firm has purchased another 480 Bitcoins for $10 million.
• MicroStrategy is currently down $1.38 billion on its Bitcoin purchases.
• It is the largest corporate holder of the asset with 129,699 BTC. 

The largest corporate holder of Bitcoin still has plenty of appetite for the asset, having purchased another batch, as revealed in a regulatory filing on June 29.

On the same date, Bitcoin proponent and company CEO Michael Saylor tweeted the news that his firm had bought a further 480 BTC for around $10 million. The assets were purchased between May 3 and June 28, according to the filing.

He added that the average purchase price was $20,817 per BTC, and the company now holds 129,699 Bitcoins.

MicroStrategy has purchased an additional 480 bitcoins for ~$10.0 million at an average price of ~$20,817 per #bitcoin. As of 6/28/22 @MicroStrategy holds ~129,699 bitcoins acquired for ~$3.98 billion at an average price of ~$30,664 per bitcoin. $MSTRhttps://t.co/leQYTXn817

— Michael Saylor⚡️ (@saylor) June 29, 2022

Underwater Holdings

The move has bought the average purchase price of MicroStrategy’s Bitcoins down to $30,664. Its aggregate total purchase price to date is $3.98 billion. However, those holdings are currently worth just $2.6 billion, meaning that the firm would have lost $1.38 billion or 35% should it sell them today.

However, Saylor has no intention of selling his stash and is committed to the long-term future of the asset and its position as leader of the crypto industry. MicroStrategy (MSTR) started adding BTC to its portfolio in August 2020, when the asset was priced at around $11,000.

The crypto market slump spurred speculation that the company would be forced to liquidate some of its BTC holdings to cover losses. However, Saylor dismissed those concerns as “much ado about nothing,” claiming the asset price would need to drop below $3,500 before any additional collateral would be required, according to CNBC.

Bitcoin detractor and gold investor Peter Schiff couldn’t resist taking a swipe, commenting, “So MSTR [MicroStrategy] is down $1.4 billion on Bitcoin, yet you continue to average down, throwing not so good money after incredibly bad.” Schiff has been trolling the crypto community on social media since BTC traded in three figures.

In a counterargument, Messari founder Ryan Selkis pointed out:

“Why anyone would bet against an asset that’s taken repeated 90% beatings & responded with 20-1000x rallies is beyond me.”

The second-largest corporate holder of Bitcoin is Tesla (TSLA) which has 43,200 coins, according to BitcoinTreasuries. With a dollar-cost basis of $1.5 billion, Elon Musk’s firm is currently down 42% on the investment, which is now worth $866 million.

There have been no recent purchases by El Salvador, which last loaded up on BTC on May 9, buying another 500 for around $15 million.

Bitcoin Beats Another Retreat

Crypto markets have retreated a further 2.6% on the day resulting in Bitcoin dipping below $20,000 again on June 30. At the time of writing, the asset was trading just above that psychological level at $20,094.

Analysts expect another final flush out before markets hit their cycle floor and enter a more extended consolidation phase.