The price of Bitcoin (CRYPTO: BTC) was going up on Monday, as some big-name investors “bought the dip” over the weekend. As of 4 p.m. ET, Bitcoin was up 6% over the previous 24 hours, according to CoinDesk. And as is often the case, other popular cryptocurrencies like Ethereum (CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE) were trading higher as well, up 7% and 8% respectively.
Bitcoin buyers over the weekend included a technology company called MicroStrategy (NASDAQ: MSTR) and even a country: El Salvador. It seems that the market believes plenty of retail investors bought the dip as well, considering shares of cryptocurrency trading platform Coinbase Global (NASDAQ: COIN) also rose 5% today.
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According to a filing with the Securities and Exchange Commission (SEC) today, MicroStrategy has purchased 7,002 bitcoins in recent weeks. The purchases came between Oct. 1 and Nov. 29, costing over $414 million in total. With these 7,002 new bitcoins, the company now holds an eye-popping 121,044 bitcoins at an average price of $29,534 each.
Investors might argue that MicroStrategy would be better served using its cash to grow its business. But it’s hard to argue with the results so far. The company has spent $3.57 billion, yes. But those digital assets are worth over $7 billion as of this writing. This gain adds up to over $3 billion, which is bigger than MicroStrategy’s entire market capitalization prior to buying its first bitcoins last year.
Similar to MicroStrategy today, El Salvador President Nayib Bukele shared on social media on Friday that the country had purchased 100 additional bitcoins. At the time, the price of Bitcoin had just dropped quickly from around $60,000 each to under $55,000 each. Therefore, the country has already enjoyed a roughly $350,000 gain on this purchase.
Since El Salvador isn’t a public company, it’s not required to disclose up-to-the-minute holdings. But it could be holding well over 1,200 bitcoins in its treasury, assuming it hasn’t been quietly selling.
It’s unlikely El Salvador has been a seller — Bukele is extremely bullish on Bitcoin’s future and is even planning a city around Bitcoin. The proposed Bitcoin City will be built at the base of one of the country’s volcanos. This is to harness geothermal power and mine more bitcoin from a clean energy source.
I’m unaware of any news that would have moved Ethereum or Dogecoin today. However, the leading cryptocurrencies typically trade in tandem — they move up and down together most days, albeit at different rates. Therefore, it seems Bitcoin’s rise was good for confidence in the entire cryptocurrency space.
Confidence in the cryptocurrency space is important for Coinbase. The company facilitated $327 billion in trading volume in the third quarter of 2021 alone. This was a 29% drop from the second quarter, as volatility died down a bit. But it was still a more than six-fold increase year over year. Considering that the lion’s share of Coinbase’s revenue comes from trading volume, the company certainly wants to see trading volumes hold up.
However, Coinbase is actively pursuing a future that isn’t dependent upon cryptocurrency-trading volatility. In Q3, the company generated $145 million in subscription and services revenue, which comprised nearly 12% of total revenue. That’s the highest non-trading revenue has ever been for Coinbase, showing good progress in the diversification of its revenue, something important for long-term shareholders.
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