Bitcoin's massive price drop has sparked fear among newbies to force a sell-off, but institutional investors are buying the drop as they hoard more Bitcoin. The move is led by MicroStrategy, who announced earlier this week that it had spent approximately $ 489 million on 13,005 units. This brings your total purchase to 105,085 BTC.
According to the company, the average purchase price of its more than 100,000 Bitcoin holdings is $ 26,080 per unit, including fees and other expenses. As of June 21, the Virginia-based enterprise software company's stake was valued at more than $ 3 billion.
The company recently participated in a program to raise $ 1 billion by selling additional shares to buy more Bitcoin. According to MicroStrategy CEO Michael Saylor, the Bitcoin business is driving shareholder profitability.
"We rotated our shareholder base and transformed into a company that can sell business software and acquire and hold bitcoins, and we have succeeded in doing so thanks to leverage. "
Shares of the company have also been in a surprising bull run with a rise of 423% since its first purchase of Bitcoin was announced on August 10.
Institutional investors have plans for Bitcoin
Investment firm VanEck has also filed a new draft prospectus with the US Stock Exchange (SEC) for a Bitcoin futures mutual fund. The Bitcoin strategy fund will invest in Bitcoin futures contracts. Not only that, they will venture into blended investment vehicles and exchange-traded products (ETPs), although the fund will not invest directly in Bitcoin.
The fund's investment in Bitcoin futures would be through a subsidiary in the Cayman Islands, as the portfolio is managed by Gregory Krenzer. Last month, the company introduced thematic ETFs to expose companies to the cryptocurrency and blockchain ecosystem. It also has a Bitcoin exchange-traded fund under review in the US.
Another company looking to buy more of the fall is Digital Currency Group, Inc. (“DCG”), the parent company of Grayscale Investment, LLC. DCG has authorized the purchase of up to $ 50 million in shares of the Grayscale Ethereum Classic Trust. He reportedly plans to buy on the open market with cash on hand.
"The actual timing, amount and value of the stock purchase will depend entirely on a number of factors, including available cash levels, price, and prevailing market conditions."
Wang Chun, co-founder of the China-based mining pool F2Pool has also revealed to have bought 1,100 Bitcoin in recent days.
The surge in institutional interest has risen since last month when Bitcoin was approaching $ 30,000 from $ 43,000. As of May 21, 2021, wallets linked to the counter registered an outflow of 10,292 BTC. The next day, it rose to 11,056 BTC, the highest since December 31. This is important to measure institutional interest, since large investors often use the OTC table to avoid influencing the price of assets on the stock market.