$70,000 is just around the corner. The person behind the surge in Bitcoin prices is actually a “micro” company

On the evening of March 5, the crypto community was boiling because after a long 28 months, Bitcoin once again set a new historical high, reaching 69080 USDT at one point, breaking the previous high of 69040.1 USDT set in November 2021, and is now just around the corner from US$70,000.

If nothing unexpected happens, many "Bitcoin surge" analyses in the industry will focus on macro factors such as halving and interest rate cuts, but Koala Finance believes that this market rise may be related to a "micro" company, which is MicroStrategy. Let us conduct an in-depth analysis in this article.

MicroStrategy announced a fundraising of US$600 million to increase its Bitcoin holdings the day before the surge. Why can it always grasp the opportunity accurately?

In fact, just before Bitcoin surged on the evening of March 5, MicroStrategy "suddenly" announced plans to sell $600 million in principal amount of convertible senior notes due in 2030 to qualified institutional buyers through private placement, based on market conditions and other factors. MicroStrategy also expects to grant the initial purchasers of the notes the option to purchase an additional principal amount of up to $90 million within 13 days of the first issuance date of the notes (including that day).

MicroStrategy is an American business intelligence software company whose CEO Michael Saylor is a staunch supporter of Bitcoin. Since August 2020, MicroStrategy has converted most of the funds on its balance sheet into Bitcoin and has now become one of the world's largest Bitcoin holders.

There are several reasons why MicroStrategy was able to time the rise in Bitcoin prices so accurately:

• MicroStrategy is optimistic about Bitcoin in the long term: Michael Saylor believes that Bitcoin is the best candidate for the future global reserve currency and sees it as an investment tool to fight inflation. Therefore, MicroStrategy has been committed to holding Bitcoin for a long time and will not change its investment strategy due to short-term price fluctuations.

• Keen insight into market sentiment: MicroStrategy has been closely following the Bitcoin market and is able to accurately judge changes in market sentiment. Prior to the announcement on March 4, 2024, Bitcoin prices had been rising for several weeks in a row, and market sentiment was at a high point. MicroStrategy chose to announce fundraising to increase its holdings of Bitcoin at this time, which was undoubtedly the best time to seize market sentiment.

• Strong financial strength: MicroStrategy is a highly profitable company with sufficient financial strength. This enables MicroStrategy to raise a large amount of funds in a short period of time and quickly convert them into Bitcoin.

Moreover, along with the rise in Bitcoin prices, MicroStrategy's stock price also broke through $1,300, and is now at $1,341.38, with a daily increase of 24.27% and a year-to-date increase of 105.25%. Market analysts believe that if this trend continues, MicroStrategy is expected to hit its highest closing price since March 2000 (when its stock price reached $2,267.50), but its current stock price is still nearly 60% lower than its historical closing high of $3,130.00 on March 10, 2000.

Of course, MicroStrategy's investment strategy also has certain risks. If the price of Bitcoin falls sharply, MicroStrategy's asset value will suffer significant losses.

However, from the current point of view, MicroStrategy's investment strategy seems to be successful. Since August 2020, the value of Bitcoin held by MicroStrategy has increased several times, bringing rich returns to the company's shareholders. It is reported that MicroStrategy Chairman Michael Saylor has increased his personal wealth by about US$700 million after the continuous rise in the price of his company's stock and Bitcoin. Michael Saylor is MicroStrategy's largest investor and owns about 12% of the company's shares. He also revealed that he personally owned 17,732 Bitcoins in 2020, so his holdings and positions climbed from US$2.27 billion at the beginning of this week to US$2.96 billion.

Can MicroStrategy drive crypto whales to support Bitcoin?

Koala Finance learned that MicroStrategy currently holds about 193,000 BTC, far exceeding the Bitcoin holdings of other listed companies. Its average purchase price is 31,544 USDT per coin. Calculated at $69,000, the floating profit exceeds $7 billion.

Market analysts believe that MicroStrategy may "stimulate" more crypto whales to enter the market. For example, shortly after it announced that it would continue to buy Bitcoin, HODL15Capital noticed the buying action of a mysterious whale. Because each increase in position is about 100 BTC, the mysterious address is also named Mr. 100. After frequent increases in positions recently, the address now holds a total of about 51,064 BTC, worth about US$3.5 billion.

As a large institutional investor, MicroStrategy's continued optimism about Bitcoin may have an impact on other crypto whales. Its investment strategy also demonstrates its confidence in the long-term value of Bitcoin, which may encourage other crypto whales to continue holding or increasing their holdings of Bitcoin. In addition, MicroStrategy's successful investment may attract other crypto whales to follow suit, which may also lead to further increases in Bitcoin prices.

Summarize

At this stage, most institutions continue to be optimistic about the long-term growth trend of BTC, but some practitioners are also warning of potential callback risks. As BTC hits a new historical high, the most concerned issue for investors is undoubtedly whether BTC can stand firm here and continue its upward trend. Let us wait and see.