Saylor’s Latest BTC Acquisition is 20% Costlier than Last: New BTC Bottom?
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Saylor’s Latest BTC Acquisition is 20% Costlier than Last: New BTC Bottom?

MicroStrategy now owns more than 0.5% of Bitcoin's circulating supply. Even with BTC's price rising, Saylor continues to buy.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Bitcoin’s recovery seems to be on track. The last time Michael Saylor bought thousands of Bitcoins, they were 20% cheaper. Nobody knows if this is a signal for the new bottom toward $100k, but much can be gleaned from the numerous headlines suggesting a bullish sentiment over the last week.

MicroStrategy Continues to Accumulate Bitcoin

After a hiatus of two months, Michael Saylor’s MicroStrategy announced the purchase of 3,907 Bitcoins, as of August 24th for Q3 2021. The SEC filing shows the average price of BTC purchased at $45,294, altogether making it a $177 million investment. Saylor’s last BTC acquisition was three times larger. On June 21, his firm bought 13,005 BTC at an average price of $37,617, elevating its BTC holdings to 105,085 Bitcoins, at the time.

Now, MicroStrategy holds 108,992 Bitcoins, as a result of selling its MSTR class A shares to Jefferies Group. Its fate tied to Bitcoin, MicroStrategy follows its peaks and valleys closely, but it managed to outperform Bitcoin within the 3-month period by 15%.

MSTR vs BTC performance over a 3-month period, (source: TradingView.com)

Speaking of performance, yesterday, Bitcoin breached the $50k range, its highest rally since the notorious Elon Musk tweet and China FUD in mid-May. As it stands at press time, MicroStrategy’s BTC holdings are valued at about $5.28 billion. If you had any doubt, this means that Michael Saylor is one of the few Bitcoin whales with over 100k BTC.

If you thought the 1% was tiny, 0.00001% of BTC addresses hold over 100k of BTC. (source: BTC.com)

The question is, which bullish winds are pushing Bitcoin right now, to make the move to buy nearly 4k Bitcoins at the $45k price level? Less than a month ago, people feared it would drop to its next $26k resistance level. It turned out, strong hands took over, making it comfortably breach $40k.  

What’s in Store for Bitcoin After MicroStrategy’s Latest Purchase?

Regardless of Bitcoin’s upcoming supply shock as it reached 2021’s low of only 13.2% of its circulating supply on exchanges, last week was packed with bullish news for the entire crypto space. The most important one is another milestone for Bitcoin’s Lightning Network, a layer-2 parallel network on top of Bitcoin’s blockchain that makes transactions faster and cheaper.

Within the last month, the Lightning Network (LN) surpassed 25,000 nodes, marking an 8.24% increase in the network’s capacity to handle transactions. In essence, LN is seen as the fix for the divergence between Bitcoin (BTC) and Bitcoin Cash (BCH). The latter became much more suitable for daily transactions, fitting the original Satoshi vision with Bitcoin as a peer-to-peer payment system.

LN makes it possible for Bitcoin to retain its digital gold status, while also serving as a currency. After all, without LN, it wouldn’t have been feasible to offer Bitcoin as legal tender in El Salvador. This continues to bear fruit. Just yesterday, Substack, a popular publishing platfor,m announced Bitcoin integration for its 500k paid subscribers, taking advantage of LN.

At the same time as Lightning Network expands Bitcoin’s reach, culturally significant news continues to stack up. For the first time, a football stadium will fly a crypto exchange banner on the football field. Forming a sponsorship with FTX exchange for $17.5 million, UC Berkeley will have the FTX logo displayed on the 20 and 30 yard line on the field, alongside the team’s social media channels.

Next, we had Coinbase acquiring $500 million worth of cryptocurrencies. It is unclear how many will go to BTC. However, 10% of Coinbase’s quarterly income will be distributed alongside BTC, ETH, DeFi tokens, and other Proof-of-Stake crypto assets.

Lastly, we had Visa commit to another milestone after pushing the envelope with crypto integrations. Of all companies, Visa, with its dominant 50% credit card market share, bought a CryptoPunk NFT worth $150k. Although this negligible transaction was not directly related to Bitcoin, it is an important signal showing people that blockchain finance is not a fad. Keep in mind that Visa CFO Vasant Prabhu said in July to CNBC that:

“We are doing a lot to create an ecosystem that makes cryptocurrency more usable and more like any other currency”

While Visa is partnering with Coinbase, BlockFi, Circle, and crypto startups, MasterCard isn’t resting either. This summer, in partnership with Winklevoss’ Gemini, the second largest payment gateway will issue a Gemini Credit Card across all 50 states. Currently, it is only available through a waitlist as people line up for the opportunity to earn up to 3% cryptoback on spent dollars.

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Is Bitcoin Heading for Another FOMO Run?

As you can see, mainstream financial media is stirring up the crypto hype once again. Almost every day, a new crypto inroad is laid out. Alongside MicroStrategy, Tesla, and Square, a new company is following their lead. Texas biotech firm Spinesmith Holdings announced on August 18th it will convert its balance sheet to BTC and then HODL. The company currently generates ~$15 million in annual revenue.

By deciding to buy BTC during this period, Michael Saylor seems to also bet on Bitcoin’s rise as “digital property”. So far, the accumulation trend warrants this sentiment.

However, no one can predict the moves of whales in the crypto ocean. If Bitcoin temporarily drops, it always bears keeping in mind that volatility is one of crypto’s strongest features. In such a scenario, the worst that an investor can do is sell at a loss because of emotional panic.

Saylor thinks that each cryptocurrency has its place, but it will take a while for them to be recognized in Bitcoin’s shadow. Which one would you pick as the next big star? Let us know in the comments below.

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