MicroStrategy’s Bitcoin Holdings Turn Profitable as BTC Surpasses $30,000
MicroStrategy, the business intelligence company known for its significant Bitcoin holdings, has seen its investment turn profitable for the first time since July. This comes as the price of Bitcoin broke through the $30,000 mark.
MicroStrategy’s Paper Profits
As of October 23, MicroStrategy held 158,245 BTC, valued at $4.847 billion. The company has made approximately $132 million in paper profits from its original investment. MicroStrategy purchased Bitcoin at an average cost of $29,870 per coin, resulting in a profit of at least $130 per coin.
MicroStrategy began buying Bitcoin in 2020 and increased its purchases in 2023 after experiencing losses due to the US Federal Reserve’s interest rate policies and high-profile crypto bankruptcies. In September 2023, the company acquired an additional 5,444 BTC by raising capital.
Michael Saylor, the co-founder and chairman of MicroStrategy, shared data demonstrating Bitcoin’s outperformance compared to traditional assets since the company adopted its cryptocurrency-buying strategy in August 2020.
Bitcoin’s Future Price Movement
Bitcoin has struggled to maintain a clear bullish momentum above $30,000 since May 2022. There is a possibility that this scenario may repeat in the coming weeks, potentially pushing MicroStrategy’s BTC investment below its average buying price once again.
The daily relative strength index (RSI) for Bitcoin is currently at its most overbought levels since January 2023. An overbought RSI could lead to a drop in price or sideways consolidation. If a correction occurs, Bitcoin’s price may head towards its 50-day exponential moving average (50-day EMA) around $27,720 in November.
However, if Bitcoin can maintain $30,000 as a new support level, it could reach the next resistance area at $32,000. This level has not been seen since May 2022.
Potential Impact of Bitcoin ETF Approval
CryptoQuant suggests that the potential approval of a Bitcoin exchange-traded fund (ETF) in the US could have a strong bullish impact on the market. It predicts that an ETF approval could increase Bitcoin’s net capitalization by $155 billion.
If this scenario unfolds, CryptoQuant believes that Bitcoin’s price could reach $50,000 to $73,000 in 2024, which would be beneficial for MicroStrategy. However, even if a Bitcoin ETF is approved, MicroStrategy intends to continue its BTC investment strategy.
Hot Take: MicroStrategy Sees Profitable Returns on Bitcoin Investment
MicroStrategy has achieved profitability on its Bitcoin investment as BTC surpasses $30,000. With paper profits of approximately $132 million, the company’s decision to purchase and hold Bitcoin has paid off. However, future price movements remain uncertain. The overbought RSI and lack of clear bullish momentum may lead to a correction in Bitcoin’s price. On the other hand, maintaining $30,000 as a support level could open doors for further gains. Additionally, the potential approval of a Bitcoin ETF in the US could significantly impact the market and potentially boost Bitcoin’s price. Despite these possibilities, MicroStrategy remains committed to its BTC investment strategy.
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