MicroStrategy's Bitcoin Purchases Tend to Be Short-Term Negative for Prices, Research Shows
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 $31,000.
The dull market response is consistent with the cryptocurrency's record of losing some ground following MicroStrategy's announcements of new coin purchases of over 1,000 BTC, according to data analyzed by K33.
"MicroStrategy BTC purchase announcements tend to be followed by short-term negative price action in BTC, as the market absorbs the fact that certain buy-side liquidity has left the market," Vetle Lunde, research analyst at K33, told CoinDesk.
Since 2020, bitcoin has registered an average daily return of negative 2% on days of MSTR announcements. The average weekly return following MSTR's announcement is slightly positive.
"The short-term impact tends to reverse in the days that follow, and there are no clear evidence of a prolonged adverse market impact on MicroStrategy announcements, with the average weekly return sitting in slight positive territory," Lunde said.
MicroStrategy began adding bitcoin to its balance sheet three years ago as a hedge against the Federal Reserve’s the-then ultra easy monetary policy. Recently, MicroStrategy’s CEO Micheal Saylor that the crypto market is likely to become BTC-centric due to the recent U.S. regulatory crackdown on the digital assets industry.
Edited by Oliver Knight.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Meme Coin Craze: Comparing MoonBull's Tokenomics with Competitors' Risky Profits
- MoonBull ($MOBU) raised $450K in Stage 5 presale, offering 9,256% ROI with sustainable tokenomics including liquidity injections and burns. - Rivals BullZilla ($BZIL) and CULEX ($CULEX) also attract investors, with BZIL projecting 2,738% ROI and CULEX showing grassroots growth despite less structured models. - Upcoming U.S. inflation data and favorable crypto regulations create a speculative environment, favoring projects with transparent governance and deflationary mechanisms like MoonBull. - MoonBull’s
Ethereum News Update: The Future of Ethereum’s Price Depends on ETF Inflows and Accommodative Fed Indications
- Ethereum ETFs saw $141.6M inflows on Oct 21, led by FETH and ETHA, reversing prior day's outflows. - Price near $3,857 faces $3,800 support and $4,500 resistance, with 35.2% surge in 24-hour trading volume to $45.8B. - Whale accumulation and 400% stablecoin growth signal bullish sentiment, while Fed's Oct 28-29 rate decision could drive further moves. - Upcoming Fusaka upgrade (Dec 3, 2025) aims to boost network efficiency, while Ferrari's 2027 crypto token hints at expanding adoption.
XRP News Update: LTC Properties Revamps Holdings Amid Uncertainty Over Litecoin's "Silver" Reputation
- Litecoin's "digital silver" status remains debated as LTC Properties, a seniors housing REIT, sells $79M in nursing centers to reinvest in stabilized SHOP assets. - The REIT's 62% seniors housing focus and 19% SHOP allocation reflect strategic diversification toward sustainable long-term value, mirroring crypto investors' utility-driven priorities. - Analysts split on LTC's price trajectory, with Deutsche Bank raising its $34 target to $37, while macroeconomic risks and regulatory uncertainty cloud bulli
Aster News Today: Crypto Market Warms Up After CZ's Pardon, ASTER Surges by 20%
- Aster (ASTER) surged 20% to $1.13 as U.S. pardon of Binance's CZ eased crypto regulatory tensions. - Binance's BNB rose 4%, reflecting broader optimism in CZ-backed projects post-pardon. - Aster announced 70-80% Season 3 trading fees allocated to ASTER buybacks, boosting investor confidence. - The rally contrasts prior $770M liquidations, signaling crypto market normalization amid regulatory clarity.
Trending news
MoreCrypto prices
More
