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El Salvador and MicroStrategy Add to Their BTC Treasury as Bitcoin Records Heaviest Monthly Loss Since 2011

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Business intelligence firm MicroStrategy now holds three times as much Bitcoin as Tesla following its latest scoop.

The firm revealed on Wednesday via a Form 8-K filing with the SEC that it had added 480 BTC to its balance sheet, bought at $20,817 each, including incurred expenses. The acquisition, which occurred between May 3 and June 28, brings the total sum held by the Saylor-led company to 129,699 BTC, acquired at an average of $30,664. Tesla, the second-largest Bitcoin corporate holder, has 43,200 BTC in its books.

A $10M reaffirmation of the ‘hodl’ strategy

The latest addition to its balance sheet, which comes amid an extended downhill run since the start of the year, substantiates his unwavering stance. It follows an April purchase of 4,167 BTC, collectively acquired at approximately $190.5 million. The purchase, albeit small relative to previous ones, was met with praise from observers who described the move as actions that backed his words.

Earlier this month, there were speculations that the company risked a margin call on its loan when BTC/USD plunged below $21k, but CEO Michael Saylor dismissed them as a canard. The chief executive remains optimistic about the prospects of the leading cryptocurrency in the long term and recently dispelled rumors that the company was looking to offload its BTC holdings.

Notwithstanding reassuring remarks in interviews and on his active Twitter platform, there are concerns about the impact that the currently struggling prices may have on the company’s financial muscle. Bitcoin Treasuries data shows that the firm is nursing a net unrealized loss of $1.456 billion on its Bitcoin investment.

Bitcoin Treasuries

On the other hand, Tesla’s $1.5 billion BTC investment is down $660 million at writing. Block and Marathon Digital, which make up the top five biggest holders, also had net unrealized losses in their Bitcoin holdings at press time.

Nayib Bukele: Bitcoin is the future

Bitcoin prices have been sliding this year on the back of a poor macro-environment, with the downtrend intensifying in the second quarter fueled by a mix of factors, including rising inflation and the collapse of Terra. This, however, hasn’t swayed the views of fellow Bitcoin advocate and El Salvador President Nayib Bukele.

Bukele revealed Thursday that the country had purchased 80 additional BTC, which copped at $1.52 million.

“Bitcoin is the future. Thank you for selling cheap! he wrote on the Twitter announcement post, attaching images of the purchase.

The country’s Bitcoin treasury chest is estimated at least 2,381 BTC based on reported announcements since adopting the cryptocurrency as legal tender last September. Notably, El-Salvador’s purchase follows the acquisition of 500 BTC in May at an average of $30,744.

President Bukele, much like Saylor, has shown no intentions of dumping Bitcoin or abandoning his belief in the asset’s potential. Finance Minister Alejandro Zelaya also recently backed the President’s strategy while confirming the country wasn’t considering selling its Bitcoins.

Bitcoin (BTC) shed more than 37% in June, the heaviest monthly loss since 2011

Bitcoin price succumbed to pressure and drifted beneath $20k on the last day of June, falling to a ten-day low of $18,730. The plodding Bitcoin price action saw the asset register a record-high monthly loss of 37.28%, the largest since September 2011. For context, the asset lost 36.57% at the peak of 2020’s bear market and 24.92% during the March 2020 market-wide crash triggered by the coronavirus pandemic.

Bitcoin monthly returns. Source: Coinglass

The price tumble comes as the European Central Bank hints that inflation adjustments may be around for a while. In a conference at the ECB Forum event, European Central Bank head Christine Lagarde remarked that inflation levels might never retreat to pre-COVID lows.

Expect more losses on Bitcoin but a recovery to $28,000 is in sight, Deutsche Bank analysts

Financial services and investment giant Deutsche Bank has projected that Bitcoin price will climb to $28,000 by the end of the year, a 30% ascent from the current price mark of $19,480.

BTC/USD 24-hr chart. Source: Messari

The bank’s prediction hinges on the cryptocurrency maintaining the correlation it has exhibited with benchmark US stocks in the last eight months. The bank theorized that the S&P would regain the value it has shed since January before year-end, and the market leader could tag along if it continues charting a closely-related course.

The projection contrasts that of cryptographer and Blockstream CEO Adam Back, who forecasted mid-last month that Bitcoin could see an ascent to $100,000 propelled by bullish factors among them, the asset severing its correlation with traditional finance markets.

The bank’s assessment by research analyst Galina Pozdnyakova and senior economist & strategist Marion Laboure also advanced that the digital assets market is fragmented at present. This, the analysts contend, works against crypto assets, including Bitcoin, which could post more declines in the short term.

The duo additionally drew comparisons between the leading asset and diamonds, an interesting outlook as opposed to past references with gold. They view Bitcoin as a highly-marketed asset, making it more like diamonds and different from gold, an asset considered a haven.

To learn more about Bitcoin visit our Investing in Bitcoin guide.

Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.

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