Between blockbuster initial public offerings on Wall Street, the proliferation of prediction markets and the unbreakable rally of anything within touching distance of artificial intelligence, there is no shortage of hyped up trades for trend-conscious investors to pile into.
That has left cryptocurrency investors with a bad bout of FOMO reeling from news overnight that Strategy, the world’s largest bitcoin treasury, said it had sold off its holdings in the digital currency for the first time since 2022.
Strategy’s Michael Saylor at a bitcoin conference in April. The company’s announcement that it was selling bitcoin for the first time since 2022 sent jitters through the cryptocurrency market. Bloomberg
“Now that [Strategy] has sold even a small amount, it’s basically broken the fog,” said Pratik Kala, head of research and a portfolio manager at Apollo Crypto. “People are now questioning: ‘Well, if the largest holder of bitcoin is selling, what does that mean?’
“It will create a little bit of a fear and uncertainty doubt cycle.”
The world’s largest cryptocurrency tumbled to below $US68,000 on Wednesday morning, having lost more than 17 per cent since early May. The latest dip followed a 10 per cent increase for the digital coin in April, driven in large part by a buying spree from Strategy.
Strategy, which was founded and chaired by high-profile billionaire Michael Saylor, pivoted from a data mining business to a bitcoin treasury in 2020. It stockpiles bitcoin with the aim of driving up the cryptocurrency’s price and in turn Strategy’s own share price.
‘Never sell’ vow goes sour
After its April buying spree, Strategy overtook BlackRock to become the world’s largest institutional holder of the cryptocurrency, with almost 4 per cent of global supply worth about $US66.7 billion ($93.1 billion).
But Saylor – who only last year decreed on X to “never sell your bitcoin” – backtracked on his bullish crypto bet overnight on Tuesday when Strategy announced to the market that it had sold 32 coins from its stockpiles for $US2.5 million.
The company said it expected to use the proceeds to fund distributions on its “preferred stock”, a number of high-yield investment products that Saylor set up in the past year that are backed by the vast bitcoin holdings.
Saylor hinted at a possible transaction last month during the company’s first-quarter earnings call.
“We’ll probably sell some bitcoin to fund a dividend, just to inoculate the market, just to send a message that ... ‘look, the company is fine, the bitcoin is fine, the industry is fine, the world didn’t come to an end’,” he said.
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