Is there something else behind MicroStrategy’s “All in Bitcoin”?

The price of Bitcoin fell below MicroStrategy’s holding cost for a short time, and it was rumored that it may have secretly sold more than 8,000 Bitcoins.

Last year’s bull market in cryptocurrencies attracted a number of US-listed companies. Elon Musk also changed his call for US stocks to bitcoin. Tesla and other listed companies also bought a lot of bitcoin in addition to their main business. However, the sharp turnaround in the market this year has led to the provision of more than 100 million US dollars of impairment in these companies’ 2021 annual reports and 2022 first quarter reports. In addition, some bitcoin mining companies that went public last year and expressed their “hodl” attitude have also begun to express the idea of ​​selling some bitcoins. And the listed companies that still say they will not sell any bitcoins, it seems that only MicroStrategy is left.

But is this software company that has almost turned the purchase of bitcoin into its main business, is it true that it has not sold bitcoin so far? A few clues on the chain have us questioning this.

MicroStrategy’s Road to Bitcoin Accumulation

MicroStrategy announced its financial report for the first quarter of 2022 on May 3, Beijing time. The financial report shows that the company currently holds a total of 129,218 bitcoins, with an average cost of $30,700. In the first quarter, the company made another $170.1 million in Bitcoin impairment charges, resulting in a loss of $130.8 million in the quarter.

The news of MicroStrategy’s public purchase of Bitcoin can be traced back to August 11, 2020, when MicroStrategy stated that it had spent $250 million to purchase 21,454 Bitcoins according to the asset allocation strategy formulated in its second quarter 2020 financial report. . After announcing in mid-September 2020 that it would buy 16,796 bitcoins for $175 million, and said it would use bitcoin as the main reserve asset, MicroStrategy began an unstoppable road of accumulation. The author has organized the records of MicroStrategy’s purchase of Bitcoin so far as follows:

Is there something else behind MicroStrategy's "All in Bitcoin"?

According to the position data of the master institutions on the Ouke cloud chain , aside from the exchange as the custodian, the main companies that currently hold more than 100,000 bitcoins, except for and the long-defunct Mt.Gox, ranked No. 1 The third is MicroStrategy.

Is “Never Sold” True?

In fact, it was suspected last year that MicroStrategy was secretly selling bitcoin, and at the same time using the concept of bitcoin to raise stock prices and cash out. According to an article on AMBCrypto , MicroStrategy’s CFO and CTO sold $7 million worth of stock in July in an August 2021 SEC filing, top eight executives Revenue in the Crypto space is expected to be around $175 million in just one year.

Crypto KOL Whale says MicroStrategy CEO Michael Saylor and other executives may be implementing a “pump-and-dump” strategy, Whale speculates that MicroStrategy transferred its bitcoin holdings to another LLC for sale No disclosure to the SEC is required.

Last month, a Twitter user found out that MicroStrategy was secretly selling bitcoin through a suspected holding address. The user stated that MicroStrategy’s primary escrow address is 1P5ZEDWTKTFGxQjZphgWPQUpe554WKDfHQ, and the other escrow address is 1FzWLkAahHooV3kzTgyx6qsswXJ6sCXkSR. When selling, MicroStrategy will transfer bitcoin from the primary address to the second address and sell it through Coinbase and OKX. If these two addresses are really MicroStrategy holding addresses, they have sold more than 8,000 bitcoins to date.

Subsequently, MicroStrategy CEO Michael Saylor denied the speculation and said that as a public company, any changes in Bitcoin holdings must be disclosed.

The address starting with 1P5Z is the Bitcoin holding address of MicroStrategy. It seems to be recognized by a considerable number of people. The main reason is that the number of Bitcoins in this address and the time point and amount of changes in holdings overlap with the information disclosed by MicroStrategy.

Is there something else behind MicroStrategy's "All in Bitcoin"?

Statistics on the position change of this address, source: OKLink

But some opponents have questioned this. On the one hand, the address has started to increase its holdings since 2019, not August 2020, which was first announced by MicroStrategy; on the other hand, the address is not a multi-signature address. As a listed company, this behavior is too hasty, and the The address is more like the personal address of a Bitcoin whale.

The author found through its 2021 annual report that MicroStrategy did not generate non-operating income such as the sale of fixed assets in 2021, but it remains doubtful whether the audit firm could find that MicroStrategy sold Bitcoin.

Overall, in terms of earnings, MicroStrategy’s current main business does not have the ability to repay billions of dollars in debt, and the increasing leverage on buying bitcoin will eventually force it to sell some bitcoin in the future. Mitigating risk and never selling is likely to be largely just a gimmick. But as for whether it has sold bitcoin in the past two years, it will always be “Schrödinger’s cat” before it announces the position address.

The cryptocurrency bull market since 2020 has led to the entry of a large number of institutions in the traditional financial and technological fields. Bitcoin was once widely regarded as “digital gold”, which also made institutions regard it as a “good medicine” for enriching asset allocation to hedge risks in traditional financial markets. . But since the beginning of this year, Bitcoin has shown a very high correlation with U.S. stocks, and its risk-hedging properties are constantly weakening. Although it is unclear whether the “belief” of new institutional investors will loosen in such an environment, the remarks that institutions only buy or sell as Bitcoin’s long-term fundamental support may need to be reconsidered.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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