Microstrategy has raised some eyebrows as Bitcoin accumulation continues. According to recent news, the company purple ownership by 2,500 BTC for a total BTC holding of 132,500 BTC.
according to Forbesthe company used $2.36 billion in debt to buy 129,218 BTC in early 2022. The latest increase in Bitcoin holdings has had an impact on the current market with the crypto king rising by 1.6% in daily time.
BTC And MicroStrategy: What Can Happen
Former CEO of Microstrategy Michael Saylor has been touting how great Microstrategy’s humongous accumulation strategy in Bitcoin is. According to him tweet on January 7 shows the return of Microstrategy since the adoption of its BTC strategy, Bitcoin outperformed the S&P 500, precious metals like gold and silver, and big tech stocks.
But the sentiment of the crypto community can be summed up in this tweet perfectly Taha Zafarcontent manager at Polka Bridge:
Not only that, since the adoption of the Bitcoin strategy, MicroStrategy shares have very related with crypto, following strongly during the 2021 high and the subsequent decline.
Adding to the pressure is the debt accumulated as a result of the strategy. With the creditor company Silvergate Capital face financial problemsDebt accumulation Microstrategy can certainly face problems as well and can force the company to sell some bitcoins.
More Support For Bitcoin Rally?
The mixed sentiment about buying MicroStrategy Bitcoin certainly has an impact on the market. At the time of writing, BTC could test the $17,552 resistance. Breaking through it, however, is another story.
But this breakthrough scenario could still happen in the next few weeks due to broader financial markets hope from economic software landing. This will have a strong impact on Bitcoin as the crypto king is highly correlated with the S&P 500.
Adding to the momentum is the current price of BTC. At the time of writing, the coin is changing hands at $17,197 and is up 3.5% in the last seven days, which is a strong indicator that investors are now more willing to invest in riskier assets as the recession weakens.
Chart: Coingecko
However, with BTC’s strong correlation with the S&P 500, there is an effect of macroeconomic trends. With next week being the release of Consumer Price Index (CPI) reports, investors and traders need to capitalize on the momentum Bitcoin has now to make some gains.
BTC total market cap at $331 billion on the weekend chart | Chart: TradingView.com
In response, market players continue to view the CPI release on January 12 as a potential catalyst for risk assets. According to a tweet on January 6 by Michaël van de Poppe, founder and CEO of the trading company Eight, the unemployment rate will increase in the coming months and “Production will fall off the cliff if the CPI is low.”
Key decision-making should take place after the CPI data is released this Thursday.
-Featured image: StormGain