As the largest accumulator of BTC, Strategy can have an impact on the price of the asset.
Strategy’s mNAV has been trading below 1.00 recently.
The financial stability of Strategy, the company led by Michael Saylor and the largest corporate accumulator of bitcoin (BTC), has become a decisive factor for the evolution of the price of the digital currency in the short term, according to a report by the American bank JP Morgan.
According to the bank’s analysts, led by Nikolaos Panigirtzoglou, bearish pressure on the market comes on two fronts.
These are the fall of the hashrate – affected by the reiteration of the mining ban in China – and the corporate situation of Strategy.
First of all, the specialists recalled that Bitcoin hash rate has fallen. In total, 12% this week, going from 1,113 EH/s to 996 EH/s, as seen in the following graph:
This drop occurred after China prepared a new mechanism against digital mining and strengthened state coordination to contain the rise in illegal trade in crypto assets.
The bank’s analysts point out that, although a lower hashrate usually increases miners’ income, The price of bitcoin continues below its production cost.
This context, combined with high energy costs, has forced several miners to liquidate part of their holdings. A factor that usually affects the price of the digital asset because it increases the selling pressure in the market.
Bitcoin Market Focuses on Strategy
Despite this, JP Morgan considers that Bitcoin miners and their crisis They will not determine the next market move.
Instead, they believe the focus will be on Strategy. This, remembering that the ratio that compares the company’s market capitalization with the total value of its bitcoin reserves (mNAV), fell to 0.84 in November. The above, showing that the market valued the company for less than what its BTC holdings were worth.
Currently, the level has recovered and this at 1.01 at the time of writing this report. And according to the bank’s analysts, that suggests that the company you face no immediate pressure to sell your bitcoin. Additionally, you can meet financial obligations without parting with the digital asset.
The JP Morgan report says:
“If this ratio stays above 1.0 and MicroStrategy can finally prevent bitcoin selling, the markets will likely calm down and the worst for bitcoin prices will likely be behind us.”
JP Morgan, financial company.
Likewise, they recalled that Strategy also created a dollar reserve of USD 1,440 million, enough to cover around two years of debt payments and dividends. This further reduces the risk of forced sales, they say.
The insights of JP Morgan analysts meet as Strategy faces questions about its business model and regulatory pressures. This week, CriptoNoticias reported that Michael Saylor was lobbying for his company not to be excluded from the MSCI.