U.Today – One of the most well-known institutional investors is MicroStrategy. But even for experienced investors, knowing when to enter the market can be difficult, as demonstrated by its latest Bitcoin purchase, which is currently in the red.
Currently, MicroStrategy’s August 2024 acquisition of 8,169 bitcoins at an average price of $67,455 per bitcoin indicates a loss of approximately $1.3 million, meaning a decrease in value of 11.61%. Since MicroStrategy’s bitcoin holdings typically yield long-term profits, this poor performance is noteworthy. With a historical return of around 61.45% or $5.1 billion, the company has accumulated a total of over 811,000 BTC.
Still, even for institutional investors with long-term investment horizons, the recent purchase underscores the volatility and risks involved in Bitcoin. Bitcoin’s price has been erratic lately. Bitcoin is currently trading at around $59,738 on the chart shown, which is slightly below the crucial $60,000 threshold.
As of March 2024, the asset is in a descending channel and is currently near its lower boundary. The 200-day moving average, a crucial level for long-term investors, is where price action suggests Bitcoin is struggling to hold above.
This suggests a period of ambiguity in the market during which, depending on market sentiment and external variables such as macroeconomic developments, Bitcoin may attempt to reclaim higher levels or collapse below the descending channel.
The risks of accumulating Bitcoin at high levels are highlighted by the poor performance of MicroStrategy's latest Bitcoin acquisition. However, the company has a long-term plan and has made significant gains in the past. The recent drop is a minor setback that MicroStrategy should tolerate without problems, thanks to its huge liquidity.
This article was originally published on U.Today
