ChatGPT generated banner. Strategy's September purchase of 950 BTC
BTC's noticeable Green Run moves from September 18–21st
BTC made a noticeable move in September, with the large green candles on September 18 and 21 marking a sharp change from the sideways accumulation pattern visible through the preceding month.
BTC rises from its support of 76,270$ rising beyond 80,000$
The price momentum is impressive as BTC continued to move up on September 21st, with resistance of $$80,850 already broken on Sept 19th. The Orange asset reached $87,000, rising by 14% between September 18th to 21st.
As a result BTC finds potential support at higher price level of $80,800.
Visible signs of BTC's shifted price direction since August as price moves upwards
BTC star Corporate Whale, Strategy has again made news this month buying 950 BTC spending $75.7 million, paying $79,670 per BTC.
This confirms that Michael Saylor the Bitcoin and capital markets strategist of Strategy has activated Strategy's Bitcoin accumulation mode.
My earlier article noted the significance of Strategy buying 4,603 BTC on August after selling a portion of the entity's Bitcoin holding earlier, and halting BTC purchases for more than 2 months.
It may imply that Michael Saylor believed the orange crypto had finished its declining price cycle phase and Strategy may now keep purchasing BTC, entering into a Bitcoin accumulation phase.
BTC's Recovery Reawakens Strategy's Bitcoin Accumulation Playbook
This possibility looked likely as BTC price action even then implied that the orange crypto recovered from its lows below 63,000$, and has climbed up forming support at 76,232$ without falling back to earlier price levels.
Now, as Bitcoin has climbed up forming support at higher price ranges with higher low and higher high price structure, there is more grounds to presume that BTC appears to have completed its bear phase when the orange asset declined to a low of $57,964 on July this year.
Since, then BTC price structure has changed reflecting its upward price direction.
BTC’s rise created favourable conditions for Strategy to purchase Bitcoin
With BTC’s appreciation Strategy MSTR stock experienced a price shoot up with that pattern visible in the chart, as MSTR rose from128$ on September 18th to 168$ on September 21st - a 30% rise.
As BTC price increased, MSTR price shot up from 128$ to 160$ from September 18–21st
This has taken MSTR above its 200 SMA when its price rose over 165$.
Suitable Market conditions played out with these price movements – because as BTC’s price rose, so did the value of Bitcoins held by Strategy, causing appreciation of MSTR stock as well.
Strategy's favorable financial metrics with price rise of Bitcoin as of Sept 21st. Strategy.
This is reflected in the improvement in mNAV. An mNAV above 1 indicates that MSTR is trading above the net Bitcoin value per share, creating a more favorable capital-market environment for Strategy.
It was in such favourable conditions, that Strategy conducted its recent Bitcoin purchase.
Now, Strategy has grown into a larger Bitcoin Corporate Whale with total of 846,000 BTC holdings, owning 4.03% of BTC Total supply.
Mitigating risks of pursuing BTC Strategy by maintaining USD reserves in Corporate treasury
As a Bitcoin Treasury Company, Strategy has developed a capital-markets framework around its large Bitcoin holdings and BTC acquisition activities, with liquidity reserves designed to help the company meet its financial obligations during periods of market stress.
Strategy maintains liquidity across its USD Reserve and USD Cash accounts, providing cash for different corporate needs, including:
• Paying interest on debt
• Paying dividends to preferred-stock shareholders
• Funding broader capital-market activities
• Acquiring Bitcoin
The USD Reserve is primarily intended to support preferred-stock dividends and interest on debt, while USD Cash can be used more broadly for Bitcoin purchases, preferred-stock repurchases and other capital-management activities.
These liquidity buffers become particularly important during periods of declining BTC prices or weaker capital-market conditions, when raising capital may become more difficult or expensive.
During such periods, Strategy may also monetize or sell portions of its Bitcoin holdings to raise cash and strengthen its liquidity position.
Strategy’s STRC buy-backs measures
Of late, Strategy has been conducting buy-backs of its STRC preferred share as a way to support its price to be stable around 100$. This adds liquidity, defuses volatility so STRC remains in healthy valuation.
STRC recovers to 98$
Strategy's buy-back measures have had their contribution in increasing STRC to 98$ now from 71$ it was in June this year.
Favourable conditions for Strategy to purchase BTC
Strategy has in total successfully procured 846,000 BTC at an average cost of $75,416 per BTC. This means Strategy is making paper profits in Balance sheets with BTC’s price appreciating since August above the average cost of BTC purchased by Strategy.
At these times MSTR trades at a premium, with MSTR share price being higher than the share’s Net BTC value.
These favorable conditions posed sound opportunities for Strategy to accumulate Bitcoin since August.
Reference sources –
Strategy Buys 950 Bitcoin For $76M as MSTR Surges 8%: What's Going On?
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