Michael Saylor, the big boss of MicroStrategy spoke about the current events in the crypto market and pinpointed two major reasons why the market is suffering right now.
In August 2020, MicroStrategy confirmed it “purchased 21,454 bitcoins at an aggregate purchase price of $250 million” to use as a “primary treasury reserve asset.”
The CEO stated then:
“Our decision to invest in Bitcoin at this time was driven in part by a confluence of macro factors affecting the economic and business landscape that we believe is creating long-term risks for our corporate treasury program ― risks that should be addressed proactively.”
As of now, MicroStrategy owns 124,391 BTC (worth $4.85 billion).
Regarding the current events, Saylor declared:
“I think that there’s a lot of dynamics here. If you look at the entire crypto ecosystem, you have a set of regulatory uncertainty, especially regulatory uncertainty around stablecoins and crypto tokens and whether or not they’re securities. And that creates a little bit of anxiety.
You have a lot of leverage offshore. You have a lot of crypto exchanges that can trade with up to 20x leverage. And those crypto exchanges have many, many tokens that are cross-collateralized. Between them and the decentralized finance [DeFi] exchanges, you can get much higher than 20x leverage. So that’s the second source of volatility.”
He also said that the conditions we are currently experiencing offer “a great entry point for crypto-curious institutional investors who have so far been sitting on the sidelines:
I feel like it’s consolidating at this level. This is a great entry point for institutional investors. I talk to high net-worth individuals, family offices, public company executives, private company owners and they watched Bitcoin run up in 2021. And there are a lot of people that would be afraid to own it if it was going up 400% a year.
But if they’re staring at it and it’s 40% off the all-time high and it’s consolidating. And they see that it’s being embraced by people like Bill Miller, by very well-respected investors. It’s being embraced by the regulators, it’s embraced by senators and congressmen and public investors and public companies. They are looking at this as like a good entry point.”