Strategy, also known as MicroStrategy, has sold as many as 32 Bitcoins. Strategy itself is losing 5% after this transaction.
The drop in the company's value is understandable. Strategy identifies itself as a "treasury" company - meaning its main value is Bitcoin, and its business model is to accumulate it. Selling Bitcoin is a drop in the company's value. Is 32 Bitcoins a lot?
The transaction value is approximately $2.5 million, while the company still holds over $60 billion in Bitcoin. The transaction is significant, yet still marginal in a broader context; more important than the volume or value of the transaction is the change in sentiment and narrative towards cryptocurrencies.
Historically, Bitcoin has been a kind of barometer of market sentiment and risk appetite. The growth of an asset whose value, in the understanding of valuation models, is purely speculative, naturally indicates market over-liquidity and an increase in investor tolerance for risky assets.
This correlation has begun to erode over time - it is increasingly common to see Bitcoin behaving as a counterweight to equity or bond portfolios, which is an obvious conclusion of greater institutional adaptation. However, could this be a problem for cryptocurrency valuations?
Currently, Bitcoin lags far behind the indices, and there are several reasons for this.
The value of cryptocurrencies is a subjective concept in itself; scarcity (whatever it may be) does not mean value. Bitcoin itself, as a medium of payment, is a rather flawed medium, and the times when it was perceived as a technical novelty belong to the past.
- Institutional adaptation may prove to be the final nail in the coffin for cryptocurrency valuations, at least for some time.
- Bitcoin does not store value; it merely sucks up excess liquidity from the market. Bitcoin does not protect against inflation; it only benefits from loose monetary policy—and that is not the same thing. Currently, prospects for imminent rate cuts are low, if not negligible, and debt instruments pay relatively well.
- Bitcoin is no longer an investment opportunity today, but rather an alternative cost compared to much better investments, and the entry of large funds into the market has deprived speculators of the power to cause sharp price movements.
- For investors hungry for exposure to higher-risk assets, data centers and AI start-ups may now serve as investment vehicles.
BITCOIN (D1)
The price remains below the EMA200 average, and the cryptocurrency is already more than 40% away from its last peak. A strong resistance zone here may be the trend line and the Fibo 38.2 level, which should provide hope for consolidation and stopping declines, even in negative circumstances. Source: xStation5
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