MicroStrategy’s average purchase price per Bitcoin has already surpassed the $30,000 level.
MicroStrategy, a firm famous for its buying strategy, has recently released its fourth-quarter announced that it bought 660 BTC for $25 million in cash.
MicroStrategy Remains a Loyal Buyer of Bitcoin
MicroStrategy has already accumulated 125,051 Bitcoins at an average price of $30,200 per Bitcoin. The company’s recent report shows that MicroStrategy has started to accumulate Bitcoin at an average price of $11,111.
As Bitcoin moved higher, MicroStrategy kept buying. In the first quarter of 2021, the company bought 19,452 Bitcoins at an average price of $52,765 per Bitcoin. Bitcoin purchases continued in the following quarters, while the average price of MicroStrategy holdings moved higher, which is not surprising as the price of the original purchase was close to $11,000.
There’s No Turning Back for MicroStrategy
MicroStrategy’s CEO Michael Saylor has “bet the farm” on Bitcoin, and his company’s fortune depends on the success of this bet despite the fact that MicroStrategy has a real-life business.
The emergence of such buyers, who are basically “bound to hold” and buy more Bitcoin is certainly bullish for the world’s leading cryptocurrency. However, traders should keep in mind that MicroStrategy will be viewed as a “proof of concept” stock.
Given Bitcoin’s volatility, MicroStrategy’s average Bitcoin price is not that far away from the current levels near $38,000. In case Bitcoin moves below the psychologically important $30,000 level, a massive sell-off in MicroStrategy stock will likely follow, and the company may have problems raising more money for additional Bitcoin purchases. Such a scenario will also hurt general market sentiment, and other companies will think twice before adding Bitcoin to their balance sheet.
At the same time, a move back towards the $50,000 level will show that regular purchases of Bitcoin could be profitable. In this scenario, other companies may look to diversify their holdings into Bitcoin, creating a wave of corporate buyers and pushing Bitcoin back to highs.
