MicroStrategy has acquired an additional 14,620 BTC for ~$615.7 million at an average price of $42,110 per #bitcoin. As of 12/26/23,
@MicroStrategy
now hodls 189,150 $BTC acquired for ~$5.9 billion at an average price of $31,168 per bitcoin.
I fear what would happen to the market when they start selling those BTC, the market may face a huge dump. If I'm not wrong then the MicroStrategy won't be selling their Bitcoin at least for the time when Bitcoin doesn't reaches $1M a Bitcoin.
Their business model is to act as a levered bitcoin play, supported by equity sells and a small cash flow from their other business.
Basically, it is a 2X bitcoin ETF, but with no slippage (which happen in "regular" futures based 2X ETFs, which are typically to run away from).
They will probably de-lever a bit later on.
Ideally, they should de-lever during peaks and lever up during troughs, but imho, Michael Saylor got 'caught up' a little in Dec 2022.
Thankfully, he did not have covenants that might have caused him to sell at a very inopportune moment.
I calculate that at some point in Dec 2022, MSTR probably had almost zero equity: about 2X leverage at 29-30K with the price at $15-16K means that equity was then zero or perilously close to it.
