- MicroStrategy’s announcement of purchasing 12,333 BTC worth $350 million caused a short-term drop in price.
- Research confirms that MicroStrategy’s purchase announcements have a negative effect on Bitcoin’s price.
- Despite the short-term negative impact, MicroStrategy’s purchase announcements have a positive effect on Bitcoin’s price in the medium term.
A recent study conducted by K33, formerly known as Arcane Research, confirms the belief that MicroStrategy’s purchase announcements have a short-term negative impact on Bitcoin’s price. The study reveals that on days when MicroStrategy announces purchases of 1,000 BTC or more, Bitcoin’s average value decreases by around 2%.
MicroStrategy’s Bitcoin Purchases and Their Impact on Price
Vetle Lunde, an analyst at K33, explains that the perception of MicroStrategy’s purchase announcements leading to price drops has been widely accepted, resulting in these short-term negative movements.
However, despite the short-term negative impact, MicroStrategy’s purchase announcements have shown a more positive trend in the medium term. Analyzing the price reactions to the company’s announcements since its initial purchases, K33 found that the new investment announcements trigger an average increase of 0.3% in Bitcoin’s weekly performance.
The highest daily positive performance caused by an announcement occurred on September 14, 2020, with a 3% increase, while the highest weekly positive price movement of 18% was observed on December 21, 2020. On the negative side, the announcements made on June 21, 2021, and November 21, 2021, resulted in the highest daily and weekly price decreases.
Lunde notes that the short-term effect tends to reverse in the following days and that there is no evidence of long-term negative impact on Bitcoin’s price due to these announcements.
According to CMC data, Bitcoin has gained 9.6% in value in the last 30 days and has shown a 1.5% increase in the past 24 hours, currently trading at $30,500.
