Business intelligence firm MicroStrategy shows no signs of backing down on its bitcoin gambit. By the time Sam Bankman-Fried was exposed as a scam, MicroStrategy was hoarding more Bitcoin
This time, the company bought as close to the bottom as it has ever gotten. While bitcoin can always go lower, seeing MicroStrategy buy around $17k is refreshing. Interestingly, MicroStrategy also sold off some BTC earlier this month – but not for the reason you’d think (more on that below).
Crypto Biz’s definitive newsletter for 2022 discusses MicroStrategy’s Bitcoin buyout, Fidelity Investments’ foray into the metaverse, Changpeng Zhao’s response to the haters and the collective problems of Bitcoin miners.
MicroStrategy adds to Bitcoin’s share despite huge losses
Business intelligence firm MicroStrategy collected 2,395 BTC at an average price of $17,181 between Nov 1st and Dec 21st (I know the bottom was under $16,000, but that’s pretty close for MicroStrategy). After that I sold 704 BTC at a loss to make up for the previous capital gain. A few days later, the company bought an additional 810 BTC, bringing its total holdings to 132,500 BTC. Bitcoin evangelist Michael Saylor, president of MicroStrategy, has been adamant that his company plans to convert its fiat holdings into BTC for the foreseeable future and will continue to hold the leading digital asset indefinitely. MicroStrategy’s Bitcoin is now valued at $2.2 billion against a total cost basis of more than $4 billion, according to Bitcoin Detectives. This is very brutal.
Public bitcoin mining companies have a collective debt of $4 billion
Last week, we raised awareness about the impact of cryptocurrency infections on Bitcoin miners. Mining companies are in worse shape than first thought. The public miners have accumulated more than $4 billion in collective debt, which is hardly sustainable given the scale of the current bear market. Running debt to fuel commercial operations and expand capacity sounded like a good idea during the 2021 bull market