Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesBotsEarnCopy
MicroStrategy's Bitcoin Purchases Tend to Be Short-Term Negative for Prices, Research Shows

MicroStrategy's Bitcoin Purchases Tend to Be Short-Term Negative for Prices, Research Shows

CoindeskCoindesk2023/06/28 19:11
By:Omkar Godbole

Past data shows bitcoin tends to drop 2% on the day MSTR announces new purchases.

Early Wednesday, business intelligence firm MicroStrategy (MSTR) the purchase of over 12,000 bitcoin (BTC) for $347 million. The fresh accumulation has boosted the company's coin stash to 152,333 BTC.

So far, MicroStrategy's announcement failed to spur bullish action in the bitcoin market, allowing bitcoin to retreat to the lower end of the recent trading range of $30,000 to $31,000.

The dull market response is consistent with the cryptocurrency's record of losing some ground following MicroStrategy's announcements of new coin purchases of over 1,000 BTC, according to data analyzed by K33.

"MicroStrategy BTC purchase announcements tend to be followed by short-term negative price action in BTC, as the market absorbs the fact that certain buy-side liquidity has left the market," Vetle Lunde, research analyst at K33, told CoinDesk.

CoinDesk - Unknown

Since 2020, bitcoin has registered an average daily return of negative 2% on days of MSTR announcements. The average weekly return following MSTR's announcement is slightly positive.

"The short-term impact tends to reverse in the days that follow, and there are no clear evidence of a prolonged adverse market impact on MicroStrategy announcements, with the average weekly return sitting in slight positive territory," Lunde said.

MicroStrategy began adding bitcoin to its balance sheet three years ago as a hedge against the Federal Reserve’s the-then ultra easy monetary policy. Recently, MicroStrategy’s CEO Micheal Saylor that the crypto market is likely to become BTC-centric due to the recent U.S. regulatory crackdown on the digital assets industry.

Edited by Oliver Knight.


44

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!

You may also like

VIPBitget VIP Weekly Research Insights

In 2025, the stablecoin market shows strong signs of growth. Research indicates that the market cap of USD-pegged stablecoins has surged 46% year-over-year, with total trading volume reaching $27.6 trillion, surpassing the combined volume of Visa and Mastercard transactions in 2024. The average circulating supply is also up 28% from the previous year, reflecting sustained market demand. Once used primarily for crypto trading and DeFi collateral, stablecoins are now expanding into cross-border payments and real-world asset management, reinforcing their growing importance in the global financial system. More banks and enterprises are starting to issue their own stablecoins. Standard Chartered launched an HKD-backed stablecoin, and PayPal issued PYUSD. The CEO of Bank of America has expressed interest in launching a stablecoin once regulations permit (via CNBC). Fidelity is developing its own USD stablecoin, while JPMorgan Chase and Bank of America plan to follow suit when market conditions stabilize. Meanwhile, World Liberty Financial (backed by the Trump family) has introduced USD1, backed by assets such as government bonds and cash.

Bitget VIP2025/04/25 06:05
Bitget VIP Weekly Research Insights