The business intelligence company MicroStrategy announced yesterday that they’ve purchased another 5,050 Bitcoins.
Michael Saylor, the CEO of MicroStrategy and famous Bitcoin maximalist, made the announcement on Twitter. This shopping spree has been going on since 2020 as the company has been selling shares to accumulate on BTC. With a staggering total of 114,042 Bitcoins, Saylor’s strategy of Bitcoin hodling has been a massive success since the %5.05 billion worth of BTC is up over 50% of the $3.16 billion initial investment.
This is the second big purchase in the past few weeks. On August 24, Saylor announced the purchase of 3,907 Bitcoins.
In order to fund the latest purchase, MicroStrategy sold 555,179 shares from July to September 12. The financial service company Jefferies Group was in charge of selling off the class A common stock. At a $727.64 price per share, the total net proceeds were just under $400 million dollars.
The Big Bet
Considering the high volatility of the crypto market, these massive purchases are extremely risky. There have been numerous outspoken critics of Michael Saylor stating that his actions can increase the volatility even further. Making these radical and high-risk decisions can only happen when there is absolute certainty. bullish stance on cryptocurrencies has become a faith-based phenomenon since it has repeatedly proven to be successful. Time and time again, challenge after challenge, crypto has had incredible growth rates. However, inflation and volatility should not be taken lightly. A realistic point of view is always required to make successful investments.
To put that in perspective, based on the data provided by coinguides, let’s take a look at some interesting statistics. In order for Bitcoin to reach the $100K target, with the current circulating supply, the total market cap should be at $1.88 trillion dollars. This is more than double the current $850.6 billion right now. In that regard, based on the $100k price target for 2021 requires more than a trillion dollars added to BTC market cap in only 3 months!
These giant investments funded by selling shares of your own company can only increase the already high volatility. Subsequently, in case of a market crash caused by whales, it is first and foremost the people with smaller investments who lose their money.
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