MicroStrategy’s Bitcoin stash back in profit with BTC price above $30K

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MicroStrategy’s Bitcoin stash back in profit with BTC price above $30K
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MicroStrategy’s Bitcoin (BTC) holdings have turned profitable for the first time since July, now that BTC has broken through $30,000.

MicroStrategy up $132 million in paper profits

As of Oct. 23, MicroStrategy held 158,245 BTC, worth $4.847 billion, up about $132 million from the original amount invested — with the Bitcoin purchased at an average cost of $29,870 per coin. In other words, the firm is now up at least $130 per coin.

MicroStrategy Bitcoin holdings as of Oct. 23. Source: BlockchainCenter.Net

MicroStrategy started buying Bitcoin in 2020 and ramped up purchases in 2023 as its price recovered from extreme losses resulting from the United States Federal Reserve’s policy around interest rate hikes as well as high-profile crypto bankruptcies and implosions.

In September 2023, MicroStrategy acquired 5,444 BTC by raising an equivalent amount of capital, mirroring the approach that saw the firm buy approximately 12,333 BTC by raising funds earlier this year.

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Michael Saylor, the co-founder and chairman of MicroStrategy, shared data showing Bitcoin’s outperformance versus traditional assets since the company adopted its cryptocurrency-buying strategy in August 2020.

Bitcoin vs. S&P 500, Nasdaq, gold, silver and bond returns since August 2020. Source: Michael Saylor/X

Will Bitcoin price rise further into 2024?

Since May 2022, Bitcoin has failed to establish a clear bullish momentum after crossing $30,000. This scenario may repeat in the coming weeks. This, in turn, risks pushing MicroStrategy’s BTC investment below its average buying price once again.

BTC/USD daily price chart. Source: TradingView

More downside cues come from Bitcoin’s daily relative strength index (RSI), now at its most overbought levels since January 2023. As a rule of technical analysis, an overbought RSI (above 70) could prompt BTC’s price to drop or consolidate sideways. 

A correction scenario will see Bitcoin’s price head toward its 50-day exponential moving average (50-day EMA; the red wave) near $27,720 in November, down about 10% from current levels.

Conversely, maintaining and confirming $30,000 as the new support level will open the door toward the next big resistance area at $32,000 — a level not seen since May 2022.

Related: How high can Bitcoin price go by 2024?

From a fundamental perspective, the potential approval of Bitcoin exchange-traded fund (ETF) in the U.S. serves as a strong bullish backdrop, according to CryptoQuant. It notes that the approval of a Bitcoin ETF could boost the Bitcoin market’s net capitalization by $155 billion.

CryptoQuant argues that if this happens, the price of Bitcoin could hit $50,000 to $73,000 in 2024, which would certainly become a boon for MicroStrategy. However, the firm says it will stay on its BTC course even if a Bitcoin ETF gets the green light. 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.



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