The price adjustment of Bitcoin (BTC) not only hurts individual scammers – the biggest players suffer in different ways.
Market data from March 5 showed that the shares in MicroStrategy, which owns more than 91,000 BTC, more than halved in just three weeks.
MicroStrategy continues to buy Bitcoins
On the day the company confirmed that it had added an additional 210 BTC to its $ 10 million holdings, MicroStrategy shares reached a local low of $ 628. At its peak in February, MSTR traded at just over $ 1,300.
Volatility is a comment on the growth and fall of Bitcoin in its latest bullish wave, which was characterized by extreme volatility in both directions.
MSTR Dollar Chart (Red) vs. BTC / USD Chart (Blue). Source: Tradingview
However, since he started adding bitcoins to his balance in August last year, the overall impact on MSTR remains transformative. Before this move, it was barely over $ 100.
Anthony Pompigliano, co-founder of Morgan Creek Digital, commented on the latest acquisition: “They now have 91,064 bitcoins on balance.”
“This may be one of the greatest manifestations of conviction in the history of the public market.”
Hayes: Bond Return May Force Investors to “Get Out of Bitcoin”
This “belief” cannot serve the company in the short term, as Bitcoin’s bull cycle faces macroeconomic problems.
For Arthur Hayes, the former CEO of the derivatives giant BitMEX, central bank policy could, under extreme circumstances, withdraw capital entirely from cryptocurrency.
In a new blog post this week, he explained that the reason is that the Federal Reserve may decide to raise interest rates, which will hurt investors across the board, but will also see periods of record low interest rates inflating volatility.
He wrote: “I do not have a model for assessing the relationship between the two, but at a high level, if global liquidity can provide real returns on government bonds, it will come out of bitcoin / cryptocurrency.”
“The whole point of this exercise is to maintain / increase purchasing power rather than energy. If it could be done with the most liquid asset, government bonds, liquidity would have been an easy choice. ”
If such an event occurs in the future, Bitcoin will rely more on its technological premise, which Hayes believes would be a disappointment if there was not a lot of money on board.
“The amount of remaining technological value is beyond my capabilities,” he warned.
“However, this is much lower than the current price of Bitcoin security today.”
Arthur Hayes anti-inflationary option chart. Source: David Venturi / Twitter
To counteract the risk, investors must take advantage of both the unique potential of the cryptocurrency and future price volatility.