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Bitcoin slows down, but MicroStrategy doesn’t!

Photo of: Joseph Stone
by Joseph Stone

Bitcoin was diving on Monday, dragging the major Altcoins like ETH and XRP in its wake. Nevertheless, MicroStrategy is continuing its policy of buying nearly 30,000 additional Bitcoin. Grayscale, on the other hand, is choosing to slow down.

The publisher, which has held significant capital in Bitcoin since August, is not deviating from its investment trajectory. MicroStrategy recently raised $650 million in convertible bonds to finance further purchases of Bitcoin (BTC).

This is now complete. On December 21, the publicly traded company announced the acquisition of an additional 29,646 Bitcoin. In total, the company has thus made an investment of more than one billion dollars in cryptocurrencies.

Isn’t it too much of a risk? This is the opinion of a Citbank analyst, who downgraded the publisher’s rating accordingly. The finance expert criticizes MicroStrategy for a “disproportionate” focus on the BTC.

MicroStrategy and its management are not convinced by this reading. The firm now owns 70,470 bitcoins. The average price of each token is about $15,964. Bitcoin was falling sharply on December 21. The investor remains a winner, despite an asset that has been worth about $22,600.

According to MicroStrategy’s President and Chief Financial Officer, “Bitcoin will offer the opportunity to earn higher returns and preserve the value of our capital over time compared to holding cash. ยป

Another giant in cryptocurrencies, however, seems to be slowing down the pace. For 6 of its funds, Grayscale Investments has announced that it is no longer accepting new clients. This concerns in particular Ethereum Trust and Bitcoin Trust.

However, such a decision does not necessarily amount to an alarm signal. CoinDesk reminds that Grayscale periodically closes its crypto-trusts. This was the case several times for Bitcoin a year earlier.

But for an expert at JPMorgan, a correction in the price of Bitcoin is not to be ruled out. Nikolaos Panigirtzoglou believes that a drop in the flows of the first fund increases the risk of a price correction.

According to the latest figures, Grayscale Investments had $15.5 billion of crypto-assets under management on December 18. Over one month, the increase is therefore 2 billion dollars. The Bitcoin Trust alone weighs 13 billion dollars.