Business intelligence firm MicroStrategy shows no signs of backing down from its Bitcoin gambit. When Sam Bankman-Fried was exposed as a fraud, MicroStrategy was collecting more Bitcoin (BTC) – this time buying as close to the bottom as the firm has ever had. While Bitcoin can always go lower, it’s refreshing to see MicroStrategy buying around $17K. Interestingly, MicroStrategy also sold some BTC earlier this month – but not for the reason you might think (more on that below.)
The final Crypto Biz newsletter of 2022 discusses MicroStrategy’s Bitcoin acquisition, Fidelity Investments’ entry into the metaverse, Changpeng Zhao’s response to the haters, and the collective woes of Bitcoin miners.
MicroStrategy Increases Bitcoin Share Despite Sharp Losses
Business intelligence firm MicroStrategy earned 2,395 BTC at an average price of $17,181 between November 1 and December 21. (I know the low was under $16,000, but that’s pretty close for MicroStrategy). He subsequently sold 704 BTC at a loss to offset his earlier capital gains. A few days later, the company bought an additional 810 BTC, bringing its total holdings to 132,500 BTC. MicroStrategy’s chief Bitcoin evangelist, Michael Saylor, is confident that his firm plans to convert its fiat holdings into BTC in the near future and will continue to hold the leading digital asset indefinitely. According to Bitcoin Treasuries, the current value of MicroStrategy’s Bitcoin is $2.2 billion based on a total spend of more than $4 billion. It’s pretty brutal.
MicroStrategy has increased #Bitcoin Holdings ~ 2,500 #BTC. From 27.12.22 @MicroStrategy It has ~132,500 bitcoins bought for $4.03 billion at an average of $30,397/bitcoin. $MSTRhttps://t.co/lcMeULcGQk
— Michael Saylor⚡️ (@saylor) December 28, 2022
Public Bitcoin mining companies face $4 billion in collective debt
Last week we raised awareness about the cryptocurrency’s impact on Bitcoin miners. Mining companies are in worse shape than first thought. The state’s miners have amassed more than $4 billion in collective debt, which is hardly sustainable given the scale of the current bear market. During the 2021 bull market, borrowing to increase business operations and expand capacity sounded like a good idea. Now these debt levels are a huge risk. Case in point: Core Scientific, the largest debtor among miners, recently filed for Chapter 11 bankruptcy. See how much debt other major mining companies have.
CZ addresses the reasons behind Binance’s recent FUD
Crypto exchange Binance is in the news for all the wrong reasons. Its opaque management structure, shady proof-of-concept reporting and allegations of “fraudulent concealment” in France have contributed to a coordinated FUD campaign against the company. (Or is FUD the answer to the underlying problems at Binance?) Changpeng Zhao, also known as CZ, posted a series of tweets explaining why people are spreading fear, uncertainty and doubt about his exchange. According to CZ, the FUD is spread by external factors, including shills paid to make its exchanges look bad. Not sure if I get it, but you can read his reasoning below.
3/ Some industry players are watching @Binance like competition. Some have gone to extraordinary lengths to lobby against us, or have lent large sums of money to small media worth far more than the media outlet’s market value, including buying their CEOs’ houses, etc.
— CZ Binance (@cz_binance) December 23, 2022
Fidelity plans NFT market and financial services in the metaverse
While cryptocurrency investment activity is lacking among major institutions, one major player is expanding its influence in the sector. Fidelity Investments, long bullish on Bitcoin and digital assets, recently filed trademark applications for several Web3 and non-fungible token products in the metaverse. Fidelity said it is exploring a range of investment services in virtual realms, including pension funds, mutual funds and financial planning services.
Before You Go: What’s in store for cryptocurrency in 2023?
By most measures, 2022 was a terrible year for crypto. 2023 can’t get any worse… or can it? This week Market Report, I sat down with fellow analysts Marcel Pechman and Joe Hall to discuss the year ahead in Bitcoin and digital assets. While I remain optimistic about the future of Bitcoin, 2023 could see a return to basics after last year’s parade of failures and bankruptcies. You can watch the full replay below.
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