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- MicroStrategy Shares Drop 8% Following Bitcoin Purchase
MicroStrategy Shares Drop 8% Following Bitcoin Purchase
MicroStrategy’s shares fell 8% after its $209M Bitcoin buy, raising concerns about leverage and its long-term strategy.
Joe G & Money Talks
December 31, 2024 • Estimated Reading Time: 6 minutes
What we will talk about today...
MicroStrategy Shares Drop 8% Following Bitcoin Purchase
Bitcoin Whale Deposits $72M Before New Year, Pressuring Market
CZ Ponders Crypto’s Future as Bitcoin Displays Resilience
MicroStrategy’s shares fell 8% after its $209M Bitcoin buy, raising concerns about leverage and its long-term strategy.
MicroStrategy trades at a premium because it can grow its BTC per share through leverage. Trading at a premium lets them sell shares above NAV, buy more bitcoin, and reduce leverage—further increasing BTC per share. Rinse and repeat.
This is hyperbitcoinization.
— Joe Burnett, MSBA (🔑)³ (@IIICapital)
7:55 PM • Dec 29, 2024
Something doesn't add up here:
MicroStrategy, $MSTR, has been known as the most popular "levered" #Bitcoin play of the year.
Meanwhile, over the last month Bitcoin has gained +2% while $MSTR is currently down nearly -50%.
What is happening? Let us explain.
(a thread)
— The Kobeissi Letter (@KobeissiLetter)
8:35 PM • Dec 30, 2024
Main Points:
Shares Decline: Stock dropped from $318.89 to $293.59 after the BTC purchase.
Leverage Concerns: Critics point to risks from debt and equity funding for BTC buys.
Ongoing BTC Purchases: Added 194,180 BTC over eight weeks, maintaining aggressive acquisition.
Nasdaq-100 Listing: Recently added to the Nasdaq-100 index as a top-performing stock.
Market Speculation: Mixed views on MicroStrategy’s future—bullish growth or potential implosion.
Detailed Insights:
Stock Reaction: MSTR shares fell 5.3% early and another 3.19% in after-hours trading.
Funding Tactics: Financed BTC buys by selling 592,987 shares during the same week.
Hyperbitcoinization: Strategy uses premium stock value to acquire more BTC via leverage.
Market Concerns: Proposed increase in authorized shares sparks investor skepticism.
Future Outlook: Speculation ranges from market cap growth to bankruptcy risks.
When he‘s unable to refi his debt in a bear market and unlike last cycle his operating business doesn’t cover debt repayments or interest? Wouldn’t happen till 2028-9 probably though.
Literally calling for MSTR to become one of the 5 biggest companies in the world, but I guess… x.com/i/web/status/1…
— Felix Hartmann (@FelixOHartmann)
6:45 PM • Dec 30, 2024
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Bitcoin Whale Deposits $72M Before New Year, Pressuring Market
A Bitcoin whale deposited $72M on Kraken, sparking concerns of further market declines amid ongoing sell-offs.
Main Points:
Major Deposit: Whale transferred 778 BTC ($72M) to Kraken in the latest move.
Ongoing Sell-Off: Total 3,038 BTC ($286M) deposited since Dec. 20.
Market Impact: Increased liquidation risk drives bearish sentiment.
Current Price: Bitcoin trades at $92,367, down 1.1% daily with low volatility.
Key Levels: $76,160 (support) and $96,471 (resistance) critical for BTC's trajectory.
Detailed Insights:
Whale Holdings: Whale still owns 24,665 BTC, worth approximately $2.27B.
Price Pressure: Deposits coincide with market declines and technical bearish signals.
Support Concerns: Failure to hold $76,160 could trigger further selling pressure.
Market Outlook: Post-New Year recovery may stabilize BTC above critical levels.
Investor Focus: Traders eye $85,456 support and $96,471 resistance for direction.
₿itcoin reached $93,901. +0.12%
♢Ethereum reached $3,380. -1.19%
Former Binance CEO Changpeng Zhao (CZ) reflects on crypto’s unpredictable future, while Bitcoin remains a market cornerstone despite minor dips.
I often get asked what's the next hot thing in crypto? Frankly, I don't know. I try to help with as many projects as possible and see where they take us. We don't predict trends, we follow them (and try to contribute).
What do you think will be the next hot thing in crypto?
— CZ 🔶 BNB (@cz_binance)
10:33 PM • Dec 30, 2024
Main Points:
CZ’s Admission: CZ expressed uncertainty about the next big crypto innovation.
Ongoing Role: He supports blockchain education via the new Giggle Academy platform.
Bitcoin's Peak: Bitcoin reached $108,000 this year before settling at $92,722.
Market Sentiment: Binance CEO Richard Teng remains optimistic about Bitcoin’s dominance.
Crypto Outlook: Industry leaders emphasize adoption and innovation for sustained growth.
Detailed Insights:
CZ’s Stance: “A live demo is worth a thousand pitches,” CZ highlights tangible results.
Educational Focus: Giggle Academy promotes blockchain awareness and understanding.
Bitcoin Resilience: Despite a 0.89% dip, Bitcoin's strength reflects growing investor trust.
Market Dynamics: Teng’s accurate $80K+ prediction highlights confidence in BTC’s trajectory.
Uncertainty Ahead: Leaders like CZ acknowledge the challenge of predicting crypto’s next leap.
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This article is not financial advice. Market conditions can change rapidly, and past performance does not guarantee future results