Bitcoin down 3.5% as MicroStrategy confirms $1bn purchase
Bitcoin is currently trading 3.5% below today's high of $ 51,500 after MicroStrategy announced it bought more than $ 1 billion worth of bitcoin.
Michael Saylor, CEO of MicroStrategy, announced that Bitcoin was bought at an average price of $ 52,765, bringing the company's total stake in BTC to 90,531 ($ 4.44 billion).
While many would expect this news to spark a bullish reaction, the market sold out immediately as it suppressed rumors that MicroStrategy hadn't bought after taking out $ 1 billion in an unsecured loan last week.
Despite the surge alongside Bitcoin's appreciation earlier this year, MicroStrategy's stock price is down 43% from its high of $ 1,320 on February 8.
MicroStrategy bought an additional ~ 19,452 bitcoins for ~ $ 1.026 billion in cash at an average price of ~ $ 52,765 per #bitcoin. On February 24th, 2021, we acquired ~ 90,531 bitcoins for ~ $ 2.171 billion at an average price of ~ $ 23,985 per bitcoin. $ MSTRhttps: //t.co/FbsRYhXEhn
- Michael Saylor (@michael_saylor) February 24, 2021
MicroStrategy's high risk, potentially high rewards approach has not been carried over to many companies other than Tesla and Square. The former invested $ 1.5 billion in January.
This may be due to the volatility of cryptocurrencies in general, with market cycles being prone to 80% drawdowns once the hype and euphoria surrounding the respective bull markets subside.
At the time of writing, Bitcoin is trading at $ 49,450, a sharp contrast from that time last year when Bitcoin was valued at $ 10,000 before crashing to $ 3,800 in March.
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