Various reports say publicly-traded companies hold over 800,000 Bitcoins.
75% of those Bitcoins belong to Strategy฿. The company bought most of its stash in the past eight months, almost entirely with other people’s money.
(Assuming its website is accurate.)
Those purchases have tapered off since January. Smaller buys with each round.
Why is the pace slowing down? What does that say about the insatiable institutional appetite the gurus keep talking about? How confident are you that the trend will reverse?
Can they keep it up?
We know competing funds and companies have bought $10–20 billion this year. Surely, more funds and companies have raised money for their purchases beyond the $10–20 billion we know of.
How much more do they want to buy?
Of those who bought, what would make them want to buy a substantially larger amount?
Every day, I hear about some company buying $2 million or $10 million. A little here, a little there, and pretty soon you’re talking about big money — but that assumes they never sell any AND they have an appetite for more.
Saylor alone bought $4 billion since the start of last month.
Am I the only one who wonders if Michael Saylor is essentially the “institutions” you’re hearing so much about? Could Strategy฿ have soaked up the bulk of interest from legacy investors? Can we expect to see a gradual decline in interest over time?
Funny thing…
Also, note how an MSTR announcement has capped every upswing since the May peak.
This raises the question: have one or a few large entities taken positions based on Saylor’s actions?
We don’t know how many people have taken out long positions in spot markets or through the ETFs to hedge shorts against MSTR or a related derivative. This can happen regardless of any pattern in Bitcoin’s price at any time, but the coincidence made me wonder if there’s something else to it.
With such little volume, it wouldn’t take much to move the market. This would also explain the divergence in Bitcoin’s moves from those of the altcoin market (sideways for BTC, down for altcoins). Nobody with enough size to swing Bitcoin’s price would bother with altcoins (and probably could not find enough liquidity anyway).
It’s all speculation. These activities happen behind closed doors, off-chain. If all goes well for the participants, we’ll never know what they did — they’ll take their money and go their merry way.
But it creates a risk. If there’s a lot of leverage betting against MSTR and the stock price moves too much, too fast, those investors will sell their Bitcoin positions, potentially tanking the market.
I discussed this topic and others in a recent post for subscribers of my newsletter, Crypto is Easy. Head over to learn more.
Mark Helfman publishes the Crypto is Easy newsletter. He is also the author of three books and a top Bitcoin writer on Medium and Hacker Noon. Learn more about him in his bio and connect with him on Calendly.
