Bitcoin Gains On MicroStrategy’s Plans To Issue More Shares

Bitcoin has made headlines recently as it recorded a remarkable rise in value, reaching an impressive 135% increase this year alone. This surge was fueled by the strategic decisions made by MicroStrategy, a company that has transformed itself from a software firm into a major Bitcoin investor.

On Thursday, the digital currency gained momentum after MicroStrategy announced its plans to issue more shares, aiming to utilize the proceeds to acquire additional Bitcoin. This announcement played a significant role in boosting Bitcoin's price, which stood at $98,747 at 11:30 a.m. in Singapore, slightly down from its peak of $99,876.70 earlier in the day. A broader metric encompassing various cryptocurrencies, including Ether, Solana, and Dogecoin, also showed an increase of 0.2%, recovering from losses recorded on Wednesday.

MicroStrategy's Strategic Moves

According to Sean McNulty, a trading director at Arbelos Markets, the excitement surrounding MicroStrategy's plans is a key driver for Bitcoin's price increase. He noted, "The announcement that MicroStrategy will issue more shares next year to buy more Bitcoin is pushing up the prices. The market is being forward-looking about MicroStrategy's Bitcoin buys, and that has been the single biggest reason for the market to go up. Watching MicroStrategy news is becoming a significant part of my day."

MicroStrategy has sought permission to expand the number of authorized shares of its Class A common stock and preferred stock, as outlined in a recent filing with the U.S. Securities and Exchange Commission. This move will give the company greater capacity to enhance its Bitcoin reserves. Earlier this week, MicroStrategy revealed that it purchased an additional $561 million worth of Bitcoin, buying at an average price near last week’s record highs, marking the seventh consecutive week of acquisitions.

Market Expectations and Caution

Bitcoin's impressive performance has outpaced many traditional investments, such as global stocks and gold. However, traders have expressed some caution regarding potential market volatility. Significant expirations of open interest in Bitcoin and Ether derivatives are anticipated to create fluctuations in the market. On Friday, a record $43 billion in open interest, including $13.95 billion in Bitcoin options and $3.77 billion in Ether options, is set to expire on the Deribit exchange.

McNulty warned that market makers might need to adjust their hedges and short positions on Bitcoin as these expirations approach, which could result in a choppy trading environment on Friday.

Bitcoin, MicroStrategy, Derivatives