U.Today – One of the most well-known institutional investors is MicroStrategy. But even for experienced investors, timing the market can be challenging, as seen by their recent purchase of Bitcoin, which is currently showing red.
Currently, MicroStrategy’s August 2024 acquisition of 8,169 Bitcoins at an average price of $67,455 per Bitcoin indicates a loss of around $1.3 million, or an 11.61% drop in value. Considering that MicroStrategy’s Bitcoin holdings typically generate profits over the long term, this indigent performance is notable. With a pervasive return of around 61.45% or $5.1 billion, the company has accumulated over 811,000 BTC in total.
Still, even for institutional investors with long-term investment horizons, the recent purchase highlights the volatility and risk associated with Bitcoin. Bitcoin’s price has been volatile recently. Bitcoin is currently trading around $59,738 on the provided chart, which is slightly below the key $60,000 threshold.
The asset has been in a downtrend since March 2024 and is currently hovering near its lower boundary. A key level for long-term traders, the 200-day moving average is a level where price action suggests Bitcoin is struggling to sustain above.
This suggests a period of ambiguity in the market, during which, depending on market sentiment and external variables such as macroeconomic developments, Bitcoin could either attempt to regain higher levels or break below the descending channel.
The risk of Bitcoin hoarding at a high level is highlighted by the indigent performance of MicroStrategy’s recent Bitcoin acquisition. However, the company has a long-term plan and has made significant gains in the past. The latest decline is a minor setback that MicroStrategy should be able to tolerate without any problems, thanks to its massive liquidity.
