Business intelligence firm MicroStrategy shows no signs of backing down on Bitcoin. Right around the time that Sam Bankman-Fried was being exposed as a fraud, MicroStrategy was picking up more Bitcoin (BTC) – this time, the company bought as close to the bottom as it has ever gotten. Although Bitcoin can always go lower, seeing a MicroStrategy buy at around $17,000 is refreshing. Interestingly, MicroStrategy also sold some BTC earlier this month – but not for the reason you think (more on that below.)
Crypto Biz’s latest 2022 newsletter discusses MicroStrategy’s purchase of Bitcoin, Fidelity Investments’ foray into the metaverse, Changpeng Zhao’s response to haters, and the collective problems of Bitcoin miners.
MicroStrategy Increases Its Bitcoin Stake Despite Heavy Losses
Business intelligence firm MicroStrategy acquired 2,395 BTC at an average price of $17,181 between November 1 and December 21. (I know the minimum was less than $16,000, but for MicroStrategy it’s pretty close.) He subsequently sold 704 BTC at a loss to make up for earlier gains. A few days later, the company bought another 810 BTC, bringing its total holdings to 132,500 BTC. MicroStrategy’s main Bitcoin evangelist, Michael Saylor, has been adamant that his firm plans to convert its fiat holdings into BTC in the foreseeable future and will continue to hold the flagship digital asset indefinitely. The current value of MicroStrategy’s Bitcoin is $2.2 billion, against a global cost base of more than $4 billion, according to Bitcoin Treasuries. That’s pretty brutal.
MicroStrategy has increased its #Bitcoin Holdings by ~2,500 #BTC. As of 12/27/22 @MicroStrategy holds ~132,500 bitcoin acquired for ~$4.03 billion at an average price of ~$30,397 per bitcoin. $MSTRhttps://t.co/lcMeULcGQk
—Michael Saylor⚡️ (@saylor) December 28, 2022
Public Bitcoin Mining Companies Plagued With $4 Billion Of Collective Debt
Last week, we disclosed the impact of cryptocurrency on Bitcoin miners. Mining companies are in a worse position than initially thought. Public miners have amassed more than $4 billion in collective debt, hardly sustainable given the scope of the current bear market. Borrowing to fuel business operations and expand capacity seemed like a good idea during the 2021 bull market. Now, these debt levels are a significant risk. Case in point: Core Scientific, the biggest debtor among miners, recently filed for Chapter 11 bankruptcy. See how much money the other big mining companies owe.
CZ Addresses Reasons Behind Binance’s Recent FUD
Cryptocurrency exchange Binance has been in the news for all the wrong reasons. Its opaque management structure, murky test-reserves report and allegations of “concealment fraud” in France have contributed to a coordinated FUD campaign against the company. (Changpeng Zhao, aka CZ, posted a series of tweets explaining why people are spreading fear, uncertainty, and doubt about his exchange. In CZ’s opinion, fear, uncertainty, and doubt have spread throughout the world. External factors, including paid snitches to make their exchange look bad, I’m not sure I believe it, but you can read their reasoning below.
3/ Some industry players view @Binance as competition. We have seen some go to extraordinary lengths to lobby against us, or loaning sums of money to small media that’s worth many times the media outlet’s market value, including buying their CEOs houses, etc.
— CZ Binance (@cz_binance) December 23, 2022
Fidelity plans a marketplace for NFTs and financial services in the metaverse
Although cryptocurrency investment activity may be non-existent among large institutions, a major player is expanding its exposure to the sector. Fidelity Investments, which has long been bullish on Bitcoin and digital assets, recently filed trademark applications for various Web3 and non-fungible token products in the metaverse. Fidelity said it is exploring a range of investment services within virtual worlds, including retirement funds, mutual funds and financial planning services.
Before you go: What does 2023 hold for cryptocurrencies?
By most measures, 2022 was a horrible year for crypto. 2023 can’t be worse… or can it? In it MarketReport Earlier this week, I sat down with fellow analysts Marcel Pechman and Joe Hall to discuss the year ahead for Bitcoin and digital assets. Although I remain optimistic about the future of Bitcoin, 2023 could see a return to basics after last year’s parade of failures and bankruptcies. You can watch the full replay below.
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