The announcement was made on the same day that BTC almost marked a new all-time high (ATH).
When there is FOMO, investors buy out of fear of missing out on potential profits.
Michael Saylor, president of MicroStrategy (MSRT), detailed the company’s plan to raise $42 billion to acquire more bitcoin (BTC) as a reserve asset, with the goal of achieving higher returns on its treasuries.
As explained in a publication on X, the plan includes an offer of shares at market price for $21 billion and a goal of raising $21 billion in fixed income securities.
The decision was announced on the same day that the digital currency created by Satoshi Nakamoto was less than $300 away from exceeding the all-time high of $73,750 set on March 14. which raises questions about what the company’s true investment strategy is. At the time of publishing this note, the price of bitcoin is $69,088.
The above is clear because, first of all, the announcement could be generating FOMO (fear of being left out) in the BTC and cryptocurrency market due to the role that MSRT has, both among retail investors and in the institutional ones. Even, when it comes to investing money you currently don’t have.
In trading, the term FOMO is defined as the state of mind among investors when a financial asset increases considerably in price. When these contexts happen, people They start buying for fear of missing out on potential profits.
But what happens in this case, on the one hand, causes the desired effect: maintains the idea that MSRT will continue accumulating BTC in the next 3 yearsdespite the price fluctuations that could occur.
However, on the other hand, considering that this is a volatile market, a drop in the price of BTC will allow the firm led by Saylor to acquire BTC at lower prices in the near future, which implies higher levels of bitcoin accumulation.
In this regard, Matt Ahlborg, cryptocurrency market analyst, opined via his While adding:
“It looks like it is preparing to completely destroy retail investors, at some point, once the price of BTC crashes, which is known to happen.”
Matt Ahlborg, cryptocurrency market analyst.
Ahlborg’s concern lies in the risk that these types of ads drive FOMOin such a way that market volatility increases.
Likewise, it is worth noting that the wave of FOMO could not only impact small investors, but also large companies like Microsoft. Next December 10, the shareholders meeting of the third most valuable company in the world will vote whether or not to consider the possibility of investing in BTC.
If the proposal is approved, Microsoft would join other publicly traded companies that have bitcoin in their treasuries as a store of value. That list includes: MicroStrategy (252,220 BTC), Marathon (26,842 BTC), Riot (10,427 BTC), Tesla (9,720 BTC) and Coinbase (9,480 BTC).
As CriptoNoticias reported, the document presented by Microsoft to the Securities and Exchange Commission (SEC) mentions the company chaired by Michael Saylor and stands out: “MicroStrategy, which like Microsoft, is a technology company, but unlike Microsoft has BTC on its balance sheet, has had a higher share performance than Microsoft this year, with 313% despite making only one fraction of the business that Microsoft does.”
Although the Microsoft Board of Directors recommends shareholders to vote against the proposal, arguing that “it is unnecessary” due to the volatility of digital currencies such as BTC. The wave generated by Saylor’s announcement could reach the Redmond, Washington technology giant.
It is worth remembering that one of Microsoft’s main institutional shareholders is BlackRock, which in one of its latest technical reports described BTC as “a unique diversifying asset.” Among the arguments it provides, it mentions that the digital currency has a total supply set at 21 million, which differentiates it from fiat money, which is devalued by inflation and issuance by central banks.
In the same vein as Ahlborg, Carlos Maslatón, Argentine lawyer and bitcoiner, was consulted at LaBitConf 2024 about the movements that MicroStrategy is making and said: “Be careful with the financial handle, just as things go up, correct and go down. Nothing is a line in the world. And it’s not that when you reach a level it stays there. This is what people forget ‘No, it’s worth $100,000 now…well expect a retraction. It always happens, no matter how good your fundamentals are or how much Donald Trump says he is going to buy.”
Finally, it is important to mention that the concentration of BTC in few hands it represents a risk for its decentralization and the spirit of the Bitcoin network. Furthermore, it increases the ability of some actors to manipulate the price of the asset in pursuit of their interests.
