Review of MicroStrategy’s 28 purchases of BTC: Every announcement is a signal of decline?

Author: Nan Zhi

From August 2020 to now, MicroStrategy has announced a total of 28 BTC purchases, with a total of 158,245 Bitcoins purchased, and the total average position price is 29,582 USDT.

Every time a purchase is announced, the following voices often appear on social media:

① The average purchase price of MicroStrategy each time is higher than the market price at the time of announcement (multiple rescue);

② As soon as MicroStrategy announces its purchase of BTC, the market will start to fall.

This article reviews MicroStrategy’s 28 BTC purchases and explores whether there is some connection between MicroStrategy’s announcement of BTC purchases and the market price.

MicroStrategy Official Announcement Spread Analysis

MicroStrategy's 28 BTC purchase prices are as follows. It can be seen that there is a significant price difference between the "market price at the time of announcement" and the "purchase price" for a certain period of time.

The proportion of "market price at the time of announcement" is greater than the "purchase price" reaches 60.7%, and the average price difference is -1.43%, which means that MicroStrategy does have a certain tendency during the announcement period, with an average decline of 1.43% before announcing the purchase.

The details of the price difference (absolute value) are as follows:

• 50% of the price difference is within 1000 USDT;
• 39% spread is between 1000 USDT and 5000 USDT;
• There were three other times where the price difference exceeded 5,000 USDT, namely -5716 USDT, -5991 USDT, and -9931 USDT.

The conclusion is more significant when measured by the spread rate:

• 25% spread rate range 0%-2%;
• 39% spread rate range 2%-5%;
• 21% spread rate range 5%-15%;
• The spread rate exceeded 15% 4 times, namely -15.53%, -15.93%, 16.73%, and -17.28%.

MicroStrategy official announcement market situation analysis

We analyzed the market conditions in each period after MicroStrategy’s official announcement, excluding purchases on September 25, including:

• Time: Select length dimensions such as 1 day, 3 days, 1 week, 2 weeks, and 1 month for comparison;
• Market: Select BTC, ETH, and the average of mainstream altcoins (the top 20 non-stable coins by CoinGecko market value, including BNB, XRP, ADA, DOGE, SOL, TRX, DOT, MATIC, LTC, BCH, LINK);
• Price: Based on the closing price of each time period.

The comprehensive results are as follows:

It can be seen that the statement that "the market will start to fall as soon as MicroStrategy announces its purchase of BTC" is not groundless. In the short term, the three types of markets all tended to fall, but after a week, the probability of rising began to rise, and the ETH market law was the most common. obvious.

On the other hand, each MicroStrategy purchase amount (or amount) is different. Weighted calculation using the amount as the weight can better highlight MicroStrategy's judgment. The calculation formula is as follows:

The weighted calculation results are as follows. The decline in the first three days has remained unchanged, but the magnitude has reduced. Then the profit-loss ratio began to rise significantly, indicating that MicroStrategy has a higher probability of long-term rise when making heavy bets.

in conclusion

The market’s two general conclusions about MicroStrategy are indeed consistent with the statistical results. As the first Nasdaq-listed company to purchase Bitcoin, most of MicroStrategy’s positions with a heavy position in BTC were established at the end of 2020, and the profit has been considerable. However, it has only sold Bitcoin once so far. Although it has a short-term negative attitude, its position has proved its confidence in the bull market.