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TL;DR
- Bitcoin liquidations led to a drop towards $25,250, further diminishing bullish sentiment.
- Despite the short-term weaker sentiment, figures like Michael Saylor remain optimistic for the long run.
The crypto community is talking about the latest slump in Bitcoin. After an impressive first half of the year, the market shows significant signs of weakness.
BTC is trading a little above $26,000 at the time of writing, down 20% from the July highs.
Despite the temporary setback, periods of elevated uncertainty occurred multiple times during the last decade.
At least that’s what Michael Saylor, co-founder and executive chairman of MicroStrategy, is saying.
This publicly-traded business intelligence company now holds the largest amount of Bitcoin. Saylor is well-known as an avid BTC supporter, promoting the asset as far superior to gold.
During the last three years, he came out with multiple optimistic forecasts for the price of Bitcoin. In May 2022, Michael Saylor predicted the price could reach millions.
A few months later, he revised his forecast, saying BTC could be valued at $500,000 in the next 10 years.
BTC liquidations push prices toward $25,000
As Bloomberg pointed out, the period of calm in the crypto space ended with rapid selling this week. The decline led to losses across the entire market, putting Bitcoin on pace for the worst week since November 2022.
Some estimates indicate that the selloff resulted from $1.36 billion in crypto liquidations. Most of that amount was linked to retail selling. This isn’t unusual, as most market participants react to sudden price movements.
Although Bitcoin is down 20% from the 2023 highs, that’s not a reason for concern for Michael Saylor. Two days ago, he tweeted that “Bitcoin is a voyage.”
The crypto market is highly driven by sentiment and FOMO. Leading figures in the industry tend to cheer up the audience when the market falls.
Michael Saylor and MicroStrategy
According to the latest data available at saylortracker.com, MicroStrategy holds 152,800 BTC.
Based on the latest market price, the value of those holdings is $4.01 billion. The chart below shows green dots each time the company bought BTC during the last three years.
Another thing you should know is that the dollar cost average is $29,970. This means MicroStrategy has unrealized losses each time Bitcoin drops below that level.
Given current valuations, the company is $600 million underwater. Still, that’s better than a few months ago. Unrealized losses exceeded $1 billion in June, yet Saylor remains committed to his forecasts.
He thinks, “There’s no reason not to hold Bitcoin for 100 years”.
Also, Bitcoin is “the future of the property,” based on his claims. Many other crypto enthusiasts praise the upside potential.
They believe there is an asymmetric risk between the amount that could be lost and how much crypto could grow.
Each time Bitcoin fell, the market managed to rebound. Could the pattern repeat itself this time around as well? Thus far, we can’t see major reasons for concern since Bitcoin is still posting gains for the year.
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