MicroStrategy just bought another $10m in BTC for its billion-dollar bitcoin holdings
They say dips are for buying – and that’s apparently the approach being taken by a NASDAQ-listed software company. Its CEO Michael Saylor tweeted that his company MicroStrategy has just spent $10 million to buy 314 additional bitcoin (Go to buy bitcoin cheap guide).
MicroStrategy has purchased approximately 314 bitcoins for $10.0 million in cash in accordance with its Treasury Reserve Policy, at an average price of approximately $31,808 per bitcoin. We now hold approximately 70,784 bitcoins.https://t.co/zMJSH29bmC
– Michael Saylor (@michael_saylor) January 22, 2021
The Form 8-K filing with the Securities and Exchange Commission (SEC) confirms this latest purchase. It also includes a Crypto Engine summary of the company’s overall bitcoin position.
Based on this information, MicroStrategy currently has earnings of $1.2 billion, representing a return of approximately +104%.
„As of 22 January 2021, the company holds approximately 70,784 Bitcoins acquired at a total purchase price of $1.135 billion and an average purchase price of approximately $16,035 per Bitcoin, including fees and expenses.“
MicroStrategy has become something of a beacon for institutional bitcoin adoption. The firm has been buying BTC as an inflation hedge since September last year.
Bitcoin FUD spooks the market
In the last 24 hours or so, the bears have gone on a rampage. Huge selling pressure sent the bitcoin price down to as low as $28.6k. But a bounce off that level in the early hours revived hopes of a recovery.
Observers have attributed this week’s slump to several events. But perhaps most notable is the „double-spend bitcoin“ FUD that has been doing the rounds.
As the name suggests, double-spending refers to a potential problem where two recipients can spend the same BTC. This calls into question the validity and security of the blockchain.
It started mid-week when BitMEX Research tweeted the discovery of what appeared to be a small „double spend“.
„Today there was a stale bitcoin block of 666,833. SlushPool beat F2Pool in a race. It appears a small double spend of about 0.00062063 BTC ($21) was discovered.“
Following this, several outlets began fanning the FUD flames. Terms like „critical error“ or „scare scenario“ did little to help the cause – ultimately leading to a Twitter meltdown.
The double issue didn’t exist at all
Since then, further investigation has revealed that there was no double-spend. BitMEX Research later tweeted that it was a replace-by-fee (RBF) transaction.
What happened: someone sent 0.00062063 BTC but set the lowest possible fee. Because the fee was so low, the transaction took a long time to be confirmed. To speed up the process, the sender then tried to push the original transaction with an RBF.
However, by this time, the network had already confirmed the original transaction.
Bitfinex CTO Paolo Ardoino explained the problem as a momentary glitch during the reorganisation of the chain. But there was no security breach as the upstream RBF transaction was invalidated with the chain going down.
„What actually happened is that two blocks were mined simultaneously. As a result, there was a reorganisation of the chain that did not result in a double spend.“
So, taking this into account, the alleged problem was none at all.