Recently, the crypto market has seen a big pullback. Bitcoin has fallen below the 40,000 and 30,000 USD mark one after another, while the prices of other cryptocurrencies have basically been cut, and “cryptocurrency crash” has been on Weibo’s hot search. All kinds of negative news, which were hard to distinguish from the real ones, were also widely spread in the community, furthering the panic of crypto investors. Although there was a short pullback, investors couldn’t help but wonder: Is the bull market really over? Since the current bull market, mainly driven by the entry of institutional users, Odaily Daily Planet decided to study the cost of institutional bitcoin positions to help the majority of investors better judge the market. According to CCTV Finance, there are currently 22 listed companies worldwide that hold bitcoin, with a total of over 180,000 bitcoins and a total market cap of over $9.84 billion. Given that more than half of them hold less than 500 BTC and do not disclose the cost of their positions (Bitfarms, Riot Blockchain, and other mining companies), this article focuses on 8 of these listed companies that directly purchase BTC from the secondary market as the object of analysis.
Among the eight companies, Galaxy Digital has the lowest average position cost of $8,163, while Nexon, Aker ASA, and Mito have a relatively high cost of $50,000. The average bitcoin position cost of $26,029 across all eight companies is not far off the recent market low of $29,000, and seems to signal a short-term bottom in the market. The market is expected to pick up in the aftermath, especially considering that Tesla, which is one of the larger companies, will face serious losses when it sells below $35,000.
Details of the specific families, as shown below.
Microstrategy (NASDAQ: MSTR) is one of the top performers in this round of “institutional bulls”.
MicroStrategy is a provider of business intelligence (BI), mobile software and cloud-based services. Its key business analytics competitors include SAP AG business Objects, IBM Cognos and Oracle Corporation’s BI platform. microStrategy’s full-year 2020 revenue is $480 million and its current market cap is $4.6 billion.
On August 12, 2020, MicroStrategy made an announcement that it had officially adopted Bitcoin (BTC) as its primary reserve asset.
In the months since then, MicroStrategy has begun a buying spree. As of March 31, 2021, MicroStrategy held 91,579 Bitcoins, with a book value of $1.947 billion in digital assets (comprised solely of Bitcoins), according to its Q1 earnings report. During the second quarter, MicroStrategy purchased a total of 500 BTC on May 13 and 18, respectively.
As of May 18, MicroStrategy held a total of 92,079 Bitcoins, the largest holding of any publicly traded company, at a cost of approximately $2.251 billion and an average price of $24,450 per BTC (a large number of lower-priced BTC were purchased last year, spreading the cost).
Previously, MicroStrategy CEO Michael Saylor has stated that the entity it controls has acquired a cumulative total of 111,000 bitcoins and has not sold a single satoshi (satoshi). This total includes MicroStrategy’s 92,079 BTC and may include Saylor’s personal bitcoin reserves.
Elon Musk, CEO of Tesla, has been known to turn his hand to the crypto market. A single tweet can make bitcoin go up or down by tens of thousands of dollars, and can cause Doge and SHIB to double several times.
This year, Tesla has done two big things that have had a profound impact on the crypto market.
On February 8, Tesla said in an announcement filed with the SEC that the company planned to purchase $1.5 billion worth of bitcoin. As a result of this news, bitcoin rose from $38,800 to $48,200 that day, breaking new record highs again.
On March 24, Tesla announced on its website that it supported bitcoin payments, and on that day bitcoin rose again by more than 10%, making Tesla the first car company ever to support bitcoin car purchases.
On May 12, Musk announced on Twitter that Tesla was suspending its plan to accept bitcoin payments for its cars, citing “environmentally unfriendly” as the reason. “We are concerned about the rapid increase in fossil fuel use during bitcoin mining and trading, especially coal, which has the worst emissions of any fuel.”
Less than two hours after that tweet, the price of bitcoin plummeted from $54,819 to $45,700, the lowest since March 1.
Next, we return to the central question, what exactly is the cost of Tesla’s bitcoin holdings? Since its earnings report doesn’t directly reveal the exact amount, it adds a bit of mystery, but we can still roughly calculate it.
The quarterly results show that Tesla holds $1.331 billion in “digital currency”. Under common accounting rules, digital currency is classified as an “indefinite lived intangible asset”. If, at the end of a quarter, the price of bitcoin is higher than the price the company paid for it, the holder cannot show that appreciation on its earnings report, and the value of the position still has to be shown as the amount the company originally paid for it, or the “book value. In other words, the $1.331 billion is the cost of Tesla’s remaining BTC positions. In other words, Tesla sold some of its bitcoin in the first quarter (that position cost $169 million).
The results also show that Tesla earned $272 million in revenue from the sale of bitcoin (a net profit of $101 million), with costs as a percentage of revenue at 62.14%. Tesla’s chief financial officer, Zach Kirkhorn, said on a conference call that the transaction took place “in late March” when the average price of bitcoin was $55,100. So we can work backwards to the average cost of Tesla’s bitcoin position of $55,100 * 62.14% = $34,239, which matches the monthly average price of bitcoin from late January to February. Currently, Tesla has 38,873 bitcoins left in its hands.
On May 17, Musk tweeted that “Tesla is not selling any bitcoins. But that’s a somewhat flimsy claim in light of the earnings report.
A familiar and other national tech company, Meitu’s connection to the crypto market dates back to 2018’s BEC (Beauty Chain). This year, Meitu is back.
On March 7, Meitu announced that the group purchased 15,000 units of Ether and 379.1214267 units of Bitcoin in an open market transaction on March 5, 2021, for a total consideration of approximately $22.1 million and $17.9 million for the two cryptocurrencies, respectively.
Cai Wensheng, founder of Meitu, posted in his circle of friends that “Meitu continues to layout blockchain, and this purchase of ETH and BTC digital currencies serves as a value reserve for long-term development of blockchain strategy.” He said that Meitu is considered the first Hong Kong listed company to purchase BTC digital currency, and the first listed company in the world to use ETH as a currency value reserve.
On March 17, Meitu posted again that its wholly-owned subsidiary Miracle Vision further purchased 386.08 units of Bitcoin for a total consideration of about $21.6 million and 16,000 units of Ether for a total consideration of about $28.4 million.
On the evening of April 8, Meitu again announced that Meitu Hong Kong, a wholly owned subsidiary of the company, purchased 175.67798279 units of Bitcoin for a total consideration of approximately $10 million.
Based on the above data, Odialy Daily Planet calculated that Meitu invested a total of $49.5 million and purchased 940.89 BTC, with an average holding cost of $52,610. At the current price of $35,000, Meitu is floating at a 33% loss, or roughly $16.33 million.
Galaxy Digital has been known as the “Goldman Sachs of the crypto market,” and its founder, Michael Novogratz, spent 11 years as a partner at Goldman Sachs.
In November 2017, Galaxy Digital was officially launched; in May 2018, Galaxy Digital merged with Canadian firm First Coin Capital Corp. to form a limited partnership, Galaxy Digital Holdings LP which later became Galaxy Digital’s main operating entity; in August 2018, Galaxy Digital acquired Toronto Venture Exchange-listed pharmaceutical company Bradmer Pharmaceuticals Inc. and renamed it Galaxy Digital Holdings Ltd. Holdings Ltd. to achieve a shell listing.
Galaxy Digital has four main businesses: Asset Management, Principal Investment, Trading, and Advisory Service. Among its more notable investments, Galaxy Digital has invested in Block.one (an EOS development team), lending platform BlockFi, and others.
In its June 2020 earnings report, Galaxy Digital owned 14,651 BTC with a fair value of $1.338 billion and an average unit price of $9,138; and in its most recent in its latest quarterly earnings report, Galaxy Digital owned 16,402 bitcoins on its latest balance sheet The number of bitcoins increased. In the earnings report, Galaxy Digital explained that the increase in bitcoin holdings was primarily from non-controlling equity contributions to the Bitcoin Fund, which can be interpreted as a return on Galaxy Digital’s outbound investment returns. As a result, its average cost of ownership was further reduced to $8,163.
Marathon Patent Group
Marathon Patent Group (NASDAQ: MARA) was founded in 2010 and changed its name to its current name in 2013. The company is a digital asset technology company that works on cryptocurrency mining. They purchased mining machines and built a data center in Quebec, Canada for mining.
In 2017, Marathon went public on the NASDAQ in the U.S. and its market cap was only $50 million at its peak that year; in the past year, it has grown just over 40 times to $2.177 billion currently, thanks to the rise in the value of cryptocurrencies.
According to the official announcement, as of May 6, 2021, Marathon holds approximately 5,324 bitcoins, which are made up of two components: mining and secondary market purchases. Of these, Marathon purchased 4812.66 BTC in January of this year at an average price of $31,168, for a total cost of $150 million. At the current average price of $35,000, that’s a return of 12.3%.
Back in 2018, Square’s mobile payment service Cash App launched bitcoin trading, allowing users to buy and sell bitcoin.
Square (NADQ:SQ) is a U.S. mobile payments company founded by Jack Dorsey (one of the co-founders of Twitter.) Square users can use a mobile card reader provided by Square, used in conjunction with a smartphone, to match swipe purchases through the app in any network state, and it enables consumers, merchants It enables consumers and merchants to make and receive payments anywhere, and save the corresponding consumption information, thus greatly reducing the technical threshold and hardware requirements for card consumption payments. Currently, Square has a market capitalization of $93.3 billion.
On October 10, 2020, Square stated that it had purchased 4,709 bitcoins with a total value of approximately $50 million, and on February 24, 2021, Square again bought approximately 3,318 bitcoins for $170 million. This brings Square’s total cost to $220 million for 8027 BTC, or an average cost of $27,407 per BTC position.
Square’s CFO Amrita Ahuja said, “Bitcoin has the potential to become a more common currency in the future, and as its utilization continues to grow, we intend to learn and participate in a more compliant manner. For a company that is moving toward building a more inclusive product of the future, this investment is a critical step on that path.”
Square’s intention to purchase further bitcoins has also been hindered by the recent ‘bitcoin is not green’ thesis led by Musk, Amrita Ahuja said Square has no current plans to purchase more bitcoins and that bitcoin’s carbon footprint must be addressed and urges wider adoption of green energy.
If you’ve played a few games such as Kart Runner and Dungeons & Dragons, you’ve heard of the Korean online gaming giant Nexon, which was founded in 1994 and now has more than 60 titles in more than 190 countries.
Founded in 1994 and with more than 60 titles in over 190 countries, Nexon was first listed on the Tokyo Stock Exchange in December 2011 and was added to the Nikkei 400 in 2015 and to the Nikkei 225 by 2020. Currently, Nexon has a market capitalization of approximately $71 million.
On April 27, 2021, Nexon announced that it had purchased 1,717 bitcoins for approximately $100 million at an average price of $58,226.
Nexon CEO Owen Mahoney explained, “Our purchase of Bitcoin is a strategic arrangement that protects shareholder value and maintains the purchasing power of our cash assets. In the current economic environment, we believe bitcoin provides long-term stability and liquidity while maintaining cash value for future investments.”
Aker ASA is a Norwegian holding company with a market capitalization of $6 billion, primarily engaged in offshore fishing, construction and engineering. Founded in 2004, the company is based in Oslo, Norway, and takes its name from the former Akers mekaniske Verksted, which closed in 1982.
In March of this year, Aker ASA announced the formation of Seetee, which is dedicated to investing in bitcoin projects and companies. The company’s website states, “Bitcoin is our inventory asset, and our strategy is Hodl.”
Aker ASA provided Seetee with an initial capital of NOK 500 million ($58 million) for the first period, and the new company will hold all of its liquidity to invest in BTC, purchasing a total of 1,170 BTC at an average cost of $50,085.
This paper is based on some assumptions and may be deficient.
Some of the most recent U.S. stock company data is also not presented on the graph. For example, recently US stock Mogo Inc. (NASDAQ: MOGO) announced the purchase of 18 BTC at an average price of $33,083 …… These companies are small and do not invest a large amount of capital, but reflect the growing attitude of traditional financial markets towards cryptocurrencies such as Bitcoin and are willing to add them to their balance sheets.
As the sand becomes the tower, the armpit becomes the fur. As more companies join in and create strong buying, the crypto market will also see new opportunities for growth.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/coin-prices-plummeted-and-fell-below-the-cost-of-mainstream-institutions-positions/
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