MICHAEL SAYLOR SPARKED MARKET ANTICIPATION SUNDAY BY POSTING HIS CRYPTIC “BACK TO ORANGE” SIGNAL, HISTORICALLY A PRECURSOR TO STRATEGY ANNOUNCING SUBSTANTIAL BITCOIN PURCHASES. MARKET WATCHERS EXPECT THE COMPANY TO DISCLOSE ITS LATEST ACQUISITION MONDAY MORNING AT 8:00 AM ET, FOLLOWING A PATTERN OF WEEKLY ANNOUNCEMENTS.
THE SIGNAL COMES AS STRATEGY, THE WORLD'S LARGEST CORPORATE BITCOIN HOLDER, PAUSED PURCHASES FOR THE FIRST TIME IN MONTHS DURING THE WEEK ENDING DECEMBER 21. INSTEAD OF BUYING BITCOIN, THE COMPANY RAISED $748 MILLION THROUGH STOCK SALES TO BOLSTER ITS CASH RESERVES TO $2.2 BILLION, DESIGNATED FOR DIVIDEND PAYMENTS AND DEBT OBLIGATIONS.
THE PAUSE FOLLOWED TWO CONSECUTIVE WEEKS OF AGGRESSIVE ACCUMULATION, INCLUDING A $980 MILLION PURCHASE OF 10,645 BITCOIN BETWEEN DECEMBER 8–14 AT AN AVERAGE PRICE OF $92,098 PER COIN.
SAYLOR’S “ORANGE DOTS” HAVE BECOME SHORTHAND WITHIN THE CRYPTO COMMUNITY FOR STRATEGY’S BITCOIN PURCHASES, REFERENCING MARKERS THE COMPANY USES ON PUBLICLY SHARED CHARTS TO INDICATE EACH TREASURY ADDITION. THE PHRASE “BACK TO ORANGE” APPEARED ON SOCIAL MEDIA DECEMBER 27, TYPICALLY SIGNALING RENEWED ACCUMULATION AFTER THE COMPANY’S BRIEF HIATUS.
PAST POSTS USING SIMILAR LANGUAGE HAVE COINCIDED WITH SHARP MARKET REACTIONS, INCLUDING A DECEMBER RALLY FROM BELOW $88,000 TO ABOVE $91,000 WITHIN HOURS.
AS OF DECEMBER 14, STRATEGY HOLDS 671,268 BITCOIN ACQUIRED FOR $50.33 BILLION, REFLECTING AN AVERAGE PURCHASE PRICE OF $74,972 PER COIN. WITH BITCOIN TRADING AROUND $87,800 ON DECEMBER 28, THE COMPANY’S HOLDINGS REPRESENT AN UNREALIZED GAIN DESPITE RECENT MARKET VOLATILITY THAT SAW THE CRYPTOCURRENCY FALL ROUGHLY 30% FROM ITS PEAK.
NOT EVERYONE SHARES SAYLOR’S OPTIMISM. CANADIAN BILLIONAIRE FRANK GIUSTRA RECENTLY SUGGESTED STRATEGY MIGHT BE FORCED TO “UNWIND” ITS BITCOIN STACK TO REPAY LOANS, WARNING THAT “IF IT DOES, IT WILL CAUSE A REAL SELL-OFF IN BITCOIN”.
CRITICS ALSO NOTE THAT STRATEGY’S RECENT MAMMOTH PURCHASES HAVE FAILED TO SIGNIFICANTLY LIFT BITCOIN’S PRICE, AS LARGE PORTIONS OCCUR OVER-THE-COUNTER AND DON’T IMMEDIATELY IMPACT SPOT PRICES.
STRATEGY’S STOCK HAS DECLINED APPROXIMATELY 50% SINCE MID-OCTOBER WHILE BITCOIN FELL 30% DURING THE SAME PERIOD. THE COMPANY MAINTAINS $37.6 BILLION IN AVAILABLE CAPACITY FOR FURTHER STOCK ISSUANCES AS PART OF ITS ONGOING CAPITAL-RAISING STRATEGY, SUGGESTING CONTINUED APPETITE FOR BITCOIN ACCUMULATION REGARDLESS OF SHORT-TERM MARKET PRESSURES.
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