In recent times, the price of Bitcoin has experienced a significant decline, dropping to around $25,000 USD. This downturn has resulted in MicroStrategy Inc., a software company headquartered in Virginia, facing a loss of over $600 million USD due to the decrease in the value of the Bitcoins they hold.
MicroStrategy is the company with the largest Bitcoin holdings, possessing more than 150,000 BTC, equivalent to approximately $3.96 billion USD at the current market price. They initially acquired these Bitcoins for a total cost of $4.5 billion USD, with an average purchase price of around $29,970 USD per Bitcoin. As a result of the Bitcoin price decrease, they are now dealing with a loss of over $600 million USD.
Over just the past three days, the price of Bitcoin has dropped by 11%, going from over $29,000 USD to around $25,000 USD. This has led to some Bitcoin holders experiencing losses on their investments, and for MicroStrategy, it marks the first time since June that their Bitcoin holdings have gone into the negative.
Previously, the company had made profitable investments in Bitcoin, as the price soared above $30,000 USD, driven by institutional interest. However, these unrealized losses could shake the company’s confidence in Bitcoin. Michael Saylor, the head of MicroStrategy, is a prominent advocate of Bitcoin, often referring to it as “digital gold.” He is spearheading the company’s strategy of acquiring more Bitcoin and has committed to not selling any of their holdings.
However, MicroStrategy is not the only entity facing challenges. The value of Bitcoin has declined by over 10% in recent days, impacting not only the company but also many other Bitcoin holders. Data also reveals that the percentage of profitable Bitcoin holdings in the market has decreased from 73% to 60%, coinciding with the sharp decrease in Bitcoin’s value.
Several experts have indicated that the market is at a peak, and many investors are at risk of losses due to the decrease in Bitcoin’s price. Nonetheless, long-term Bitcoin holders remain steadfast in their belief, as they hold around 75% of the total circulating Bitcoin supply. This group, often referred to as “long-term holders,” has held onto Bitcoin for at least 155 days.