Digital currency “dead long” MicroStrategy is buying bitcoin again, this time bringing the company’s total bitcoin holdings to more than 100,000. MicroStrategy’s latest purchase has left it with a 10% loss after the bitcoin crash, with MicroStrategy shares falling more than 10% after the news was announced.
MicroStrategy said in a press release on its website Monday that the company bought an additional 13,005 bitcoins for about $489 million in cash, with an average purchase price of $37,617 per coin, including fees. And as of Monday, the company held a total of about 105,085 bitcoins (92,079 of which are held by subsidiary MacroStrategy LLC), all of which were bought at an average price of $26,080 per bitcoin, including fees. However, MicroStrategy did not release details such as the exact point at which the bitcoins were bought.
About two weeks ago, MicroStrategy also released a statement saying it would raise $400 million (later expanded to $500 million) through a private debt offering to buy bitcoin and other digital assets, depending on market conditions. The bonds are senior secured notes for qualified institutional investors and will mature in 2028. This is not the first time MicroStrategy has issued debt to buy bitcoin, as it announced a $400 million convertible bond issue back on December 7 of last year and invested the proceeds in bitcoin.
And according to a regulatory filing with the SEC on June 14, MicroStrategy plans to issue $1 billion in stock, the proceeds of which could be used to buy bitcoin.
It should be noted that MicroStrategy said in its June 7 regulatory filing with the SEC that it expects to record at least $284.5 million in bitcoin-related impairment losses for the three-month period ending June 30 due to the volatility of the currency’s price in the second quarter.
Following the news of the bitcoin purchase, MicroStrategy shares opened lower and fell below the $600 mark during the day, dropping more than 10% on several occasions during the day. By the close of trading, MicroStrategy was trading at $583.67 per share, down 9.71%. Although it has recorded a 50.22% gain year-to-date, the retracement has been more than 55% from its intraday high of $1,315 set on Feb. 9.
Bitcoin, on the other hand, continued its weak market after the news was announced, oscillating broadly around within a range of $32,000 to $33,000. According to CoinDesk, as of press time, bitcoin was at $32,505.75, down 9.20% in 24 hours. And on June 21, bitcoin had fallen to $32,166 per coin, down nearly 10% during the day. In the afternoon of that day, the relevant departments of the People’s Bank of China interviewed some banks and payment institutions, including Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank of China, Post and Reserve Bank of China, Industrial Bank of China and Alipay (China) Network Technology Co. The relevant institutions issued an announcement that night saying that the use of banking services for virtual currency transactions was prohibited.
Other major digital currencies also took a collective dive within 24 hours, and all fell more than bitcoin. According to CoinDesk, ethereum broke below the $2,100 and $2,000 barriers and was last at $1,941.25, down 13.43 percent in 24 hours, while dogcoin was at $0.2059, down 28.13 percent in 24 hours.
According to statistics from Bitcoin Home, a total of 174,815 people blew their positions in the 24 hours up to press time, with $951 million in bursts, of which over 70% were concentrated in Bitcoin and Ether.
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