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MicroStrategy, the economic monitoring company led by Michael Saylor, continues to strengthen its position in bitcoins despite market fluctuations. According to new research published by capital advisor Jeff Walton, MicroStrategy could survive a drop in the price of BTC down to $20,000 without suffering significant losses. How?
A drop in bitcoin to $20,000 does not scare MicroStrategy
For several years, MicroStrategy has adopted a bold strategy by accumulating billions of dollars in bitcoins. This approach has often been criticized, particularly due to the inherent volatility of cryptocurrencies. However, Walton states that even an 80% correction in the price of BTC would not jeopardize the company’s cash flow.
Walton’s analysis shows that the price of bitcoin would need to drop to $18,826 for MicroStrategy’s assets to be worth less than its liabilities. This resilience is attributed to how the company has structured its investments and the rapid increase in BTC’s value over time. In November, the price of BTC increased by nearly 40%, further strengthening MicroStrategy’s position.
Future Prospects
Charles Edwards, founder of the quantitative fund Capriole Investments, emphasizes that institutional demand for bitcoin is “absolutely crazy”. He notes that MicroStrategy is just one player among others in this new institutional investment environment. In fact, 13.5% of all bitcoins are now held by institutions and exchange-traded funds (ETFs), a figure that is constantly rising.
Edwards predicts that the current bullish market peak of BTC is just getting started, with a mass “fear of missing out” (FOMO) that should only manifest once the price of bitcoin exceeds $100,000. This optimistic outlook is shared by many analysts who see institutional adoption as a key factor in the future growth of Bitcoin.
In summary, despite criticism and the risks associated with BTC’s volatility, MicroStrategy appears well-positioned to withstand a significant drop in bitcoin prices. The growing institutional demand and the company’s bold investment strategy could well pay off in the long run.
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Le monde évolue et l’adaptation est la meilleure arme pour survivre dans cet univers ondoyant. Community manager crypto à la base, je m’intéresse à tout ce qui touche de près ou de loin à la blockchain et ses dérivés. Dans l’optique de partager mon expérience et de faire connaître un domaine qui me passionne, rien de mieux que de rédiger des articles informatifs et décontractés à la fois.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
