As “The Merge” nears, there’s a plethora of breaking news. More indicators of a bull run coming to the market, as reported by various news sites and even YouTube’s crypto analysts like Stock Up with Larry Jones. A new story has emerged today and if true, the event could send prices surging. MicroStrategy may buy $500-Million in Bitcoin crypto-coins from an upcoming stock sale.
Who’s Buying Half-A-Billion in Cryptos?
MicroStrategy is a business intelligence, mobile software, and cloud-based services provider. It’ become most known for its business intelligence (BI) apps, which help major companies make strictly data-driven decisions.
A ‘Stonehenge’ in the tech world, it was founded in 1989 by Michael J. Saylor, Sanju Bansal, and Thomas Spahr. It’s since become a corporation worth over $3.4-Billion US dollars and has an annual net income of over $535-Million.
And most importantly to crypto-enthusiasts, MicroStrategy is the biggest corporate buyer of Bitcoin. The company has spent an estimated $4-billion-dollars on BTC acquisition.
How Everyone Knows
This news comes from an SEC filing earlier this week.
Because the business intelligence software company is listed on the NASDAQ stock exchange, it must alert the public of certain coming actions. If it is about to do something that may affect the value of its securities or possibly influence investors decisions, the general public must be notified in advance.
“We intend to use the net proceeds from the sale of any class A common stock offered under this prospectus for general corporate purposes, including the acquisition of bitcoin, unless otherwise indicated in the applicable prospectus supplement,” MicroStrategy published in their filing to the SEC.
Being such a large investor and player in the availability of Bitcoins, MicroStrategy is a Whale on the Bitcoin market If they decided to pull their earlier investments, it could drop the market.
That’s not going to happen however.
Founder and former CEO Of Microstrategy, Michael J Saylor, is solely one of the biggest catalysts behind the entire BTC crypto-currency. He relinquished his title as CEO of MicroStrategy to become Executive Chairman, a position created just for him to focus on the company’s Bitcoin investments
In August 202, Saylor clarified his new Executive Chairman position according to CNBC.
“I believe that splitting the roles of Chairman and CEO will enable us to better pursue our two corporate strategies of acquiring and holding bitcoin and growing our enterprise analytics software business,” said Saylor on his shift of position.
He continued, “As Executive Chairman I will be able to focus more on our bitcoin acquisition strategy and related bitcoin advocacy initiatives, while Phong will be empowered as CEO to manage overall corporate operations,
Beyond the position change, Saylor has also created and engaged in various Bitcoin advocacy groups. One of those is the Bitcoin Mining Council [BMC], a group designed to help construct a safe and Eco-friendly future for BTC minting.
Lifting BTC Prices
This latest news of half-a-billion dollars more being pushed into Bitcoin could create a bull run in crypto currency. Alt coins tend to follow the trajectory of Bitcoin, and with Ethereum’s ‘The Merge’ coming up along with the $500-Million-Dollar pump into BTC tokens, things will get quite interesting as 2022 closes out.
Even if the crypto-coins market does not follow Bitcoin, the BTC token itself should increase in value quickly with such a sizable amount of tokens being purchased.
The reason the price would shift is simple to follow in layman’s terms. But to understand 100% of the variables that influence Bitcoin’s price is much more complicated.
Layman’s Explanation: What Makes Bitcoin Price Rise?
Short answer, Bitcoin production will stop at 21-million tokens. Demand increases the price for anything that’s limited in production. The lesser the amount of tokens is available, the higher the price will rise.
It’s reported that 19,148,075 Bitcoins are already mined. The general population has consumed those.
Only 1,851,925 Bitcoins are left to be mined.
At today’s price of $21,666.30 the current value of the market is just under $415-Billion-US-Dollars.
The value of the remaining tokens, yet mined, would be $40,124,362,627.50 (hypothetically; if one could purchase) .
If MicroStrategy buys $500-Million-dollars of tokens today, it would potentially boost the market value by a substantial amount. It’s also giving a strong push towards the day society will be using ‘Satoshi’ tokens instead of Bitcoin.
What’s a Satoshi?
A Satoshi is 100 millionth (1/100,000,000) of one Bitcoin. This is what will be used after Bitcoin is so popular, that owning one BTC is nearly impossible because of mainstream demand.
Today there are 106-million people who own Bitcoin. Over 1-billion people worldwide use cryptocurrency in general. The world has 7-billion people however and cryptos are not yet mainstream, as regulation has not been completed.
As Bitcoin reaches 1-Billion users, the token will become more useful and commonly held in fractional pieces versus ownership of a single token.
Once all Bitcoin tokens have been mined and there is a much higher usage rate, forcing a need for more token pieces on a day to day basis, “Satoshi” will be the term to describe the piece of a common Bitcoin holder owns.
Example: People will say , “Send me Satoshi” for the plane tickets.
These ideas were genius and had much foresight in their creation. Though it could all go differently than planned, MicroStrategy is continuing its firm belief that Bitcoin will work. The latest SEC filing proves Bitcoin is here to stay as $500-Million-Dollars more, gives a more stable foundation for the cryptocurrency to stand on..
And beyond the new investment, the company has also given others additional reasons to strengthen their faith and not believe its a pump-and-dump, rigging the trade of BTC.
MicroStrategy took out a loan earlier $205 million dollars, using Bitcoin as the collateral. That money is locked until the loan is paid off.
“What I am doing, I think, is doing my best to lead the way and to normalize the bitcoin-backed financing industry,” said Saylor on the reason for the loan.
The $500 million dollar investment has no date set but it’s possible it will happen in the coming weeks.