Crypto

MicroStrategy ignites Bitcoin turbo: A plan that shakes crypto markets

MicroStrategy wants to issue more shares to buy Bitcoin in bulk—fueling the market significantly.

Eulerpool News Dec 26, 2024, 7:29 AM

Bitcoin saw a small jump on Thursday – and the trigger is no stranger: MicroStrategy. The company, once known for enterprise software and now considered the largest Bitcoin hoarder in the world, announced plans to issue more shares to buy even more Bitcoin. The digital asset rose by 0.32% to $98,747, just below its daily high of $99,876.70.

A comprehensive crypto index including smaller tokens like Ether, Solana, and Dogecoin also recovered slightly, rising by 0.2%.

The announcement that MicroStrategy wants to issue more shares next year to buy more Bitcoin is driving prices up," said Sean McNulty, Director of Trading at Arbelos Markets. "The markets are reacting proactively to MicroStrategy's planned Bitcoin purchases, and that is currently the most important driver.

More stocks, more bitcoin, more power

According to a communication with the US Securities and Exchange Commission (SEC), MicroStrategy plans to increase the number of authorized shares of both Class A and preferred stock. The reason? More capital to invest in even more Bitcoin. With this strategy, the company has long since abandoned its original business model and developed into a Bitcoin heavyweight.

And the numbers speak for themselves: Just last week, MicroStrategy announced an additional investment of 561 million USD in Bitcoin – at the average rate of recent record highs. This marks the seventh consecutive weekly purchase.

Crypto Price Jumps, Derivatives and Volatile Outlook

But it's not just MicroStrategy's buying spree moving the markets. Bitcoin has already gained an impressive 135% this year - much more than traditional asset classes like global stocks or gold. Nevertheless, experts urge caution: the crypto derivatives markets could cause turbulence in the coming days.

On Friday, record options worth USD 43 billion expire on the derivatives platform Deribit, including USD 13.95 billion in Bitcoin options and USD 3.77 billion in Ether options.

Market participants could unwind their hedging positions and sell short options on Bitcoin. This could make the market extremely volatile," warned McNulty.

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