$5.4B Boost in Bitcoin Holdings
The new cabinet holds a friendly stance towards cryptocurrencies, having appointed crypto-enthusiast hedge fund manager Scott Bessent as the Treasury Secretary, taking a further step towards establishing a national Bitcoin strategic reserve for the United States.
Tech giant MicroStrategy has invested $5.4 billion in Bitcoin at peak prices, prompting many companies across North America to follow suit in trading activities.
MicroStrategy's CEO, Michael Saylor, stated on Monday (November 25): "MicroStrategy has purchased approximately 55,500 Bitcoins at an average price of about $97,862 each, amounting to $5.4 billion, thus realizing a quarterly return of 35.2% and a year-to-date return of 59.3% on Bitcoin."
"As of November 24, 2024, we will have purchased 386,700 Bitcoins at an average price of about $56,761, totaling around $21.9 billion," he added.
Amidst the fluctuating trends in Bitcoin, according to CoinGlass data, the total amount of liquidations across the cryptocurrency network in the past 24 hours reached $338 million, with $194 million in long liquidations and $144 million in shorts, affecting over 129,000 traders.
Due to the commitment to establishing a national Bitcoin strategic reserve, and the new cabinet comprising officials friendly towards cryptocurrencies, many companies across North America have adopted a "following the leader" trading strategy, eagerly purchasing Bitcoin for reserves in line with MicroStrategy's actions.
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Last Friday, biotechnology company Anixa Biosciences (ANIX) announced that its board agreed to purchase a certain amount of Bitcoin to diversify the company's asset reserves.
Simultaneously, fitness equipment company Interactive Strength (TRNR) revealed on Thursday that after their board approved the use of cryptocurrencies as treasury reserve assets, the company plans to invest up to $5 million in Bitcoin. Following this announcement, the company's stock price surged over 80%.
Earlier that week, biopharmaceutical company Hoth Therapeutics (HOTH) indicated plans to spend $1 million on Bitcoin, which boosted its stock price by nearly 25%—however, most of the gains were lost by the end of trading.
Similarly, companies like LQR House (LQR), Cosmos Health (COSM), Nano Labs (NA), Gaxos (GXAI), Solidion Technology (STI), and Genius Group (GNS) saw their stock prices temporarily skyrocket after announcing Bitcoin reserve plans in November. The only exception was Acurx Pharma (ACXP), whose stock price fell following the Bitcoin reserve announcement.
Youwei Yang, chief economist at BIT Mining (BTCM), stated: "Bitcoin has become particularly popular recently, compounded by MicroStrategy's stock price increase of over 500% in 2024, leading many companies (especially small-cap firms) to announce strategies for purchasing Bitcoin."
Yang also noted that this situation could conclude similarly to past bull markets: characterized by speculative trading that is ultimately unsustainable, leading to significant corrections as the market recognizes the lack of substance behind many of these announcements.
Not only American companies, but also Canadian health and plant-based e-commerce firm Jiva Technologies has become the latest to implement a Bitcoin financial strategy, having previously approved an investment of up to $1 million in Bitcoin by their board.
Lorne Rapkin, CEO of Jiva Technologies, stated: "Due to Bitcoin's status as an accepted and trusted asset class, we see a unique opportunity to strengthen our funds through resilient and innovative investments."
He further added that Bitcoin’s limited supply makes it a modern tool against inflation and a safe haven during periods of economic instability.
He mentioned favorable regulatory frameworks and the increasing likelihood of institutional adoption while emphasizing the recent influx of Bitcoin spot ETFs, which has totaled over $30 billion since their launch. He said this "highlights Bitcoin's value proposition and reinforces our belief that it represents an ideal asset for businesses seeking inflation-resistant value storage."
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