- Bitcoin dropped 5.8% from its high of $96,500, trading below $91,000 due to macroeconomic concerns.
- Michael Saylor called the dip a buying opportunity, hinting at potential future purchases.
- Strategy recently bought $2 billion worth of Bitcoin, raising its holdings to nearly 500,000 BTC.
The cryptocurrency market faced another sell-off driven by economic uncertainty and geopolitical tensions. Bitcoin, the largest cryptocurrency, dropped 5.8% from its February 24 high of $96,500. The asset briefly traded below $91,000, causing concerns among investors.
Several factors led to this decrease. Notably, the U.S. labor market faces uncertainty following Elon Musk’s Department of Government Efficiency pushing for federal job reductions. Additionally, the market awaits Nvidia’s financial report while investors express growing concerns about the AI segment. The political landscape grew unstable when President Donald Trump demanded tariffs against Canada and Mexico.
Michael Saylor Sees an Opportunity
Despite the ongoing market turbulence, Strategy Chairman Michael Saylor remains optimistic. He referred to the price drop as an opportunity, posting Bitcoin on $ale on X. Historically, Saylor’s comments have preceded large Bitcoin purchases by his firm.
On February 23, Saylor shared the Saylor Tracker, which displays Strategy’s Bitcoin purchases. He hinted that recent acquisitions were not yet reflected in the data. The following day, the company announced a $2 billion Bitcoin purchase, increasing its holdings to 499,096 BTC. This Bitcoin stash is now worth over $45.19 billion at current prices.
Strategy’s Bitcoin Purchases Continue
Strategy’s recent Bitcoin purchase was funded through a $2 billion senior convertible note offering. The offering also allows initial buyers to acquire an additional $300 million in notes before February 27. If investors take this option, Strategy may soon announce another major Bitcoin buy.
The company has followed a Bitcoin treasury strategy since 2020, increasing its holdings aggressively. However, some analysts question the sustainability of this approach. Critics argue that buying Bitcoin nearly every week may not be the best way to maximize shareholder value.
Is Strategy’s Bitcoin Approach Sustainable?
Market analysts have debated the effectiveness of Strategy’s Bitcoin-heavy investment model. Analyst James Van Straten recently suggested that the company is not maximizing shareholder returns. He argued that better buying strategies could enhance outcomes.
Similarly, analyst Caleb Franzen proposed that Strategy should time purchases based on technical indicators. He suggested buying when Bitcoin retests key levels, such as the short-term holder’s realized price or major moving averages.
Despite these concerns, Strategy’s Bitcoin strategy appears to be working for now. At current market prices, the company’s Bitcoin holdings show a paper gain of over 36%. Additionally, Strategy’s stock price has surged more than 300% over the past year.
