Key Takeaways
Why is Saylor positive about the recording?
According to him, it’s a healthy market reset that washes away excess debt and weak hands for the next rebound to a new all-time high.
What is the impact of Strategy’s $835 million offer?
It didn’t ease broader BTC selling pressure, as ETFs have been net sellers in recent weeks.
While some of the crypto community appears concerned about Following Strategy Bitcoins [BTC] After a decline in the fourth quarter, founder Michael Saylor remains bullish on the asset.
In an interview with Fox Business, Saylor claimed that BTC’s value proposition remained intact despite erasing annual gains.
He said,
“Bitco has been around for 15 years and has had 15 major declines. It has always returned to a new all-time high.”
He added:
“This (drawdown) is normal in the life cycle of an emerging transformational asset class. It’s a healthy thing, it clears out the tourists, the debt burden and the weak holders and lays the foundation for the next rally to the upside.”
The crypto asset has lost more than $35,000, or 29%, after falling from $126,000 to $90,000 in recent weeks.
Source: BTC/USD, TradingView
While the decline was still within the 30% bull run pullbacks, a key level of the bull market structure, the 50-Weekly Exponential Moving Average, has been breached during an intense sell-off.
Saylor added that Strategy can survive another 80-90% BTC drop.
Could Strategy’s $835 Million Offer Depress BTC?
That said, Strategy held BTC even in the past crypto winter and will probably withstand the next one.
The company added 8,178 BTC (worth $835.6 million) on November 17, bringing the total holdings to 649,870 BTC.
Per SEC submitthe latest purchase was largely financed by the sale of euro-denominated STRE preference shares.
However, with the price drop, Strategy’s unrealized gain on BTC investments has fallen from $31 billion (67%) to $11 billion, or about 23%.
Commenting on the paper loss, Peter Schiff, a veteran BTC critic, said: hit it was “not much to show after five years of buying.”
He added sarcastically:
“Congratulations, you are already 10% down from last week’s purchase. You need to buy even more Bitcoin this week to slow the decline.”
Julio Moreno, head of research at CryptoQuant, marked that the bids on the strategy were relatively small and unable to offset current BTC selling pressure from ETFs and long-term holders.
Ssource: CryptoQuant
The next potential catalyst for recovery could be a Fed rate cut in December, but clarity on this will be available after the September Jobs Report, scheduled for November 20.
Meanwhile, at the time of writing, MSTR stock traded back above $200, while BTC recovered $90,000, but both fell 28% and 2% year-on-year (YTD).