Bitcoin plummets to $67K after Strategy sale
Bitcoin (BTC) fell 4.4% within 24 hours of Strategy (formerly MicroStrategy) disclosing its voluntary sale of 32 BTC. Two hours later, it fell another 2%.
That sale, which reneged on multiple promises to never sell by Strategy leaders like founder Michael Saylor, preceded a decline from $72,500 per BTC at the time of the firm’s 8-K to $69,300 precisely 24 hours later.
Strategy is the second-largest known BTC investor besides its creator, Satoshi Nakamoto. The company has amassed 4.2% of the asset’s circulating supply, and its holdings exclusively increased since December 2022 until yesterday’s disclosure.
Yesterday’s sale disclosure, albeit just 0.004% of its stack, spooked countless media outlets who covered Saylor’s bearish reversal across mainstream media yesterday including CNBC, The Wall Street Journal, AOL, TheStreet, Gizmodo, and Forbes.
The disclosure’s reporting period was May 26-31 during which the sale actually occurred.
‘Never. No. We’re not sellers. We’re only acquiring and holding BTC.’
Saylor has become a minor celebrity in recent months after an aggressive media and ad campaign for STRC, Strategy’s 11.5% dividend-yielding, quasi-pegged stock that he dubiously believes is a competitor to high-yield bank accounts.
Google queries for his name reached an all-time high this year.
STRC, which doesn’t hold a stable value nor guarantee repayment of principal, has attracted four-fifths retail ownership attracted to its simplistic promotions.
It also enjoyed the credibility of the company’s BTC stack and its founder’s lapsed promises to never sell, such as his promise to Bloomberg, “Never. No. We’re not sellers. We’re only acquiring and holding BTC.”
For the first time in years, Strategy pocketed roughly $2.5 million by selling BTC at an average price of $77,135, slightly above the company’s blended cost basis of $75,699.
Proceeds of the sale, the 8-K filing noted with cinematic irony, will fund dividends on the company’s preferred shares like STRC.
“Proceeds from the bitcoin sales are expected to be used to fund distributions on preferred stock.”
-Strategy 8-K
Strategy selling BTC to ‘innoculate’ the market
Not that it reduced the irony, but Saylor had telegraphed the sale in advance.
Specifically, on his first quarter earnings call last month, he said Strategy would probably sell a little BTC to “inoculate” the market as to his willingness to sell, despite his prior promises.
Read more: STRC controversy goes mainstream
There are, of course, other macro factors that contributed to the sell-off in digital assets. The Crypto Fear & Greed Index hit 23 out of 100 yesterday, putting it firmly back in “Extreme Fear” territory.
Oil prices jumped, gold prices fell, and AI stocks continued to roar higher while siphoning speculative capital from crypto.
In summary, Strategy’s sale handed a jittery, bearish market a headline that fit the mood. Primed for bad news, many traders interpreted any disposal by the most committed buyer as a sell signal.
STRC, which Strategy tries to keep trading near $100 per share, traded below $95.60 today.
The message many market participants heard this week was that, at any moment, even the most consistent BTC bid could become an offer.
The last time the company sold, in December 2022, it offloaded 704 coins for a tax write-off purpose. It quickly bought back 810 BTC, two days later.
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