Hello as always, and welcome to today’s edition of Overbit Weekly Round Up. We’d like to jump right in with today’s edition with a name that is sure to be familiar to most by now - Michael Saylor.
On Wednesday, 24 February, it was reported that MicroStrategy, led by Bitcoin enthusiast Michael Saylor, had bought an additional $1 billion worth just days after completing another round of fundraising. This brings MicroStrategy’s total Bitcoin holdings just shy of 100,000, with the stash currently sitting at 90,531.
This most recent purchase happened over the course of last week, with an average price of $52,765. And, in total, their total spending’s $2.171 billion.
It may be a lot of numbers to wrap your head around, but the big picture is this: this decision by Saylor and MicroStrategy to invest (and continually invest) this amount of money into Bitcoin is truly unprecedented.
With BTCUSD’s market cap just shy of $1 trillion, this purchase represents just about 0.2% of the entire total market cap. Though some have disagreed with the decision, the market certainly seems to be favouring MicroStrategy’s side; Bitcoin is up 100% from their average purchase price, and their stock price has soared almost 800% since their first public buy in August.
Heading into our next story of the week, we’re covering some potential early signs of short-term bearishness from what’s happening at the Grayscale $32 billion Bitcoin Trust. For the first time in over five years, the Grayscale trust is trading at a price discount for Bitcoin, and some analysts are worried that this could weaken the price of Bitcoin.
If this pattern persists, the concern is that Grayscale could stop buying Bitcoin. As one of the biggest Bitcoin buyers, a lapse in demand might lower its price, causing people to worry that without Grayscale, the most significant regular buyer, where would the new buyers come from to help the price?
The Grayscale Bitcoin Trust is a vast pool of privately-invested funds that Grayscale, the crypto fund manager, uses to buy up Bitcoin, and then Grayscale sells shares in the Trusts to the over-the-counter public desks. In the absence of a Bitcoin Exchange-Traded Fund in the US, Grayscale trusts are among the few ways that US investors can purchase Bitcoin on the stock market. Investors may prefer stock markets over crypto exchanges for a variety of reasons. Next, it makes Bitcoin investment available for tax-sheltered accounts, such as pension accounts.
Although this may be a historical event for Grayscale’s Bitcoin Trust, it’s also important to remember this is a historical time for Bitcoin. BTCUSD currently sits more than 200% above its previous all-time high of $20,000, one many feared was its final cycle once. That being said, the crypto markets are volatile, and conditions may frequently change in uncharted waters like these. Here at Overbit.com, we’ll always do our best to keep you updated on these changes.