MicroStrategy, a company that is accumulating large amounts of Bitcoin, seems to be having a hard time at the start of this year, especially with the arrival of spot Bitcoin ETFs. The data software company's shares fell more than 20% during January, wiping about $4 billion from their market value. Meanwhile, the price of Bitcoin (BTC) has risen more than 10% in January. Despite this, MicroStrategy's value has nearly tripled in the past year.
MicroStartegy's Bitcoin Value Is $1 Billion Higher Than Company Value
MicroStrategy currently has 189,150 BTC (worth $8.7 billion) on its balance sheet, which results in the value of the Bitcoin they hold more than $1 billion higher than the actual value of the company.
However, the actual value of the Bitcoins held by MicroStrategy is somewhat lower when considering that some of them were purchased with borrowed funds. MicroStrategy has seen an approximately 49% increase in their Bitcoin purchases to date, according to BitcoinTreasuries.
Former CEO Michael Saylor's plan to sell 315,000 shares of the company, currently valued at $170.5 million, certainly doesn't help the situation. Saylor announced his intention to sell most of his shares (about a quarter of the outstanding amount) at a November conference.
The plan of this eccentric Bitcoin player is to sell 5,000 shares every trading day until April 5. To date, he has disclosed the sale of 30,000 shares worth $19.1 million — which works out to about $637.76 per share on average.
MSTR shares are currently trading about 16% below that price.
Also read: Buy Bitcoin Before or After the Halving? Here's the Guide!
When Bitcoin Strengthens, MicroStrategy Weakens
Saylor has not sold shares of the company in the past 12 years, according to OpenInsider data. He said he plans to spend some of the money earned to buy Bitcoin for his personal savings and fulfill other financial obligations.
In March last year, Saylor unsuccessfully sought to dismiss tax evasion charges filed by the District of Columbia, which accused the former CEO of owing more than $25 million in back taxes. It is not clear whether that is the obligation Saylor is referring to.
Additionally, on this day in December, other executives including the current CEO, Phong Le, and Chief Accounting Officer, Jeanine Montgomery, sold $7.7 million worth of stock.
Also read: Buy Bitcoin vs Spot Bitcoin ETF, Which is More Profitable?
Bitcoin Spot ETF Reduces Attraction of Proxy Stocks
MicroStrategy has served as a proxy investment for Bitcoin since Saylor began buying the crypto in mid-2020, with the two assets positively correlated about a year after the company's first purchase.
Those looking to add exposure to Bitcoin in their stock portfolio can easily add MSTR shares, although these shares are known to be more volatile than BTC.
Now, with spot Bitcoin ETFs in place, MicroStrategy could struggle to attract interest. Some analysts argue that MicroStrategy's core software business, which has been profitable for the past 10 years, could be a bridge to address Bitcoin's volatility.
Also read: Potential Impact of Bitcoin ETF Approval
Coinbase Shares Rise Higher Than Bitcoin and MicroStartegy
Crypto exchange Coinbase is another example. COIN is already experiencing a sharp decline today as trading volume for spot Bitcoin ETFs threatens to set a record. Likewise shares of Bitcoin miners Riot and Marathon.
However, Coinbase shares are still up more than 220% since this time last year, more than Bitcoin and MicroStrategy.
Insiders at Coinbase have sold more than $256 million in company stock in that time, including CEO Brian Armstrong and spokesman Paul Grewal, among others.
As a cohort, Coinbase insiders over the past year have sold their shares at an average price of $112.66, and COIN now trades more than a quarter above that price.
Coinbase has only posted annual net profits three times since 2017. The company has not disclosed total revenue for last year but showed a net loss of $2 million in the third quarter.
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DISCLAIMER : This article is informational in nature and is not advice, recommendation, offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time. Bittime is not responsible for changes in exchange rates or crypto asset prices.
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