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Our analysis of the situation
Press Release - September 24, 2021
Business intelligence firm MicroStrategy, led by the unwavering Bitcoin advocate Michael Saylor, has once again shattered the crypto world with its audacious $1.01 billion raise through the sale of convertible senior notes. This strategic maneuver is set to intensify the company's acquisition of Bitcoin and pave the way for the redemption of higher-yielding securities.
In an unprecedented move, MicroStrategy has earmarked a whopping $458 million from the raised funds to acquire additional Bitcoin between September 13 and September 19. This further solidifies its position as the leading publicly traded corporate holder of the cryptocurrency, with an astounding 252,220 Bitcoin amassed, currently valued at approximately $15.8 billion.
The convertible notes released by MicroStrategy come with a mere 0.625% interest rate and are slated to mature in 2028. This marks the fourth instance this year that the company has tapped into the convertible note market to fuel its Bitcoin acquisitions. As an additional coup, MicroStrategy is redeeming $500 million of higher-interest 6.125% notes due in 2028, exhibiting a strategic pivot towards lower borrowing costs while amplifying its crypto portfolio.
The visionary co-founder and Chairman, Michael Saylor, has played a pivotal role in shaping MicroStrategy's identity as a cryptocurrency investment powerhouse since it embarked on its Bitcoin journey in 2020. Under his stewardship, the company has transcended from a traditional enterprise software maker into a de facto crypto hedge fund, showcasing an unwavering commitment to digital assets amidst the tumultuous fluctuations in the market.
Notably, MicroStrategy's stock has seen remarkable surges this year, surpassing a doubling in value, outstripping Bitcoin's approximately 50% surge over the same period. This latest acquisition follows MicroStrategy's prior purchase of 18,300 Bitcoin, valued at approximately $1.11 billion last week, signifying an unyielding bullish sentiment in the digital currency space.
In response to what has been hailed as a bullish catalyst, the broader cryptocurrency market has exhibited a positive reaction to the US Federal Reserve's pronouncement on Wednesday of a 0.50% basis point rate cut. This judgment has contributed to the market's resurgence over the past week after Bitcoin's price dipped to as low as $52,640 on September 6. As Bitcoin reclaims the $63,000 milestone, efforts are underway to fortify its position above this pivotal level for the past 24 hours.
Market analyst Ali Martinez has underscored the significance of this price point, identifying it as intersecting with Bitcoin's 200-day simple moving average (SMA) on its BTC/USDT daily chart. This juncture has been deemed critical for the anticipated bull run in the year's latter part. Historical data indicates that the inability to sustain this support level has historically led to substantial corrections, a phenomenon witnessed in 2020, 2018, and 2014. Martinez has cautioned that a rebuff at this level could portend challenges for Bitcoin's future price trajectory.
To avert the risk of a steep decline, pivotal support levels have been pinpointed at $61,700 in the short term, with the $60,000 threshold serving as a crucial barrier against further price slumps. Moreover, the infusion of fresh liquidity into the market may serve as a significant impetus for the Bitcoin price, as the Fed's verdict is poised to heighten investor confidence in riskier assets such as BTC.
A decisive breakthrough and consolidation above $63,000 could set the stage for a potential challenge of the next resistance level at $64,000 in the days to come.
Featured image from DALL-E, chart from TradingView.com
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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Please, behave!