Bitcoin price rose toward $85,000 on October 21 as Strategy Executive Chairman Michael Saylor signaled optimism about another bull run. The advance came days after Strategy disclosed $193.1 million in preferred-share repurchases, far above its latest $22.1 million Bitcoin purchase.
Saylor posted “The bull market is calling” on X with a 20-second video showing a bull approaching him. He offered no Bitcoin price target or timeline for further gains. His message reflected his outlook rather than confirmation of a sustained rally.
CoinMarketCap data placed BTC near $84,600, up roughly 2.8% over 24 hours. The daily range stretched from $82,296 to $84,720, leaving the cryptocurrency close to its session high.
Can Bitcoin Price Hold Above Resistance?
On the other hand, Altcoin Sherpa challenged the validity of the recent breakout in an X post. He said, “BTC is super strong…breakout real??” On his chart, BTC was seen breaking through one resistance but encountering another further ahead.
However, research firm K33 also observed very quiet trading volumes for Bitcoin. It had been ranging between $80,000 and $84,000, while average daily spot volume had reached about $2.5 billion.
Also Read: Bitcoin price Price Watches for $90K Breakout as $85K Sell Wall Forms
Its 28-day realized volatility dropped to around 1.2%, its year-low. K33 predicted bigger volatility after this quiet period but without specifying its direction. In addition, the firm observed a stronger correlation between Bitcoin and the Nasdaq.
IBIT, which is an exchange-traded Bitcoin fund from BlackRock, witnessed inflows of 8,128 BTC on October 19, per K33. Other US spot funds posted total outflows of 1,692 BTC on that same day. The Bitcoin price will need to test the resilience of the new demand.
Why Did Strategy Spend More on Share Buybacks?
Strategy’s filing on October 19 reported the purchase of 267 Bitcoin valued at $22.1 million between October 12 and 18. The purchase price averaged $82,900 for each coin. The holdings rose to 848,517 Bitcoin.
Sales of common shares provided $22 million of the purchase sum. An additional $100,000 was derived from existing cash, and no preferred shares were sold through the market program of the company within that period.
On the other hand, Strategy purchased 1,938,780 STRC preferred shares worth $193.1 million. It was almost eight and a half times the company’s expenditure on Bitcoin within the period. There is no direct influence of the transactions on Bitcoin price fluctuations.
The board also raised its authorization for the repurchase of digital credit securities from $2 billion to $3 billion. There remained $1.16 billion under this program as of October 18.
How Does Preferred Stock Affect Bitcoin Demand?
Fidelity Digital Assets indicated that preferred share funding helped buy 135,979 Bitcoin up until October 5. In the report published on October 20, the organization showed how companies sell dividend-bearing securities to raise funding for crypto assets.
During the period from March to May, purchases of this kind exceeded 95,000 BTC, according to Fidelity, which also stated that issuers raised more than $7 billion during those three months. These numbers cannot be considered the total amount of Strategy’s Bitcoin.
There is also a cost associated with this financing method. Fidelity emphasized that the key to its effectiveness is the fact that Bitcoin value growth will exceed dividend payments. The organization warns that securities are not like money market funds.
The STRC dashboard presented the strategy’s 12% variable dividend and 12.16% effective yield. The record date was October 31, while the payment date was set for November 15.
At a Bitcoin price of approximately $84,550, Strategy’s 848,517 BTC holdings were worth an estimated $71.74 billion. Every $1,000 movement in Bitcoin’s price changes their gross market value by about $848.5 million, assuming holdings remain unchanged.
Traders are also facing two market events in the coming days. The interest rate decision by the Federal Reserve on October 28 and the United States midterm elections on November 3, are important dates for Bitcoin.
Also Read: Drift Exploiter Moves $109M in ETH to Tornado Cash
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
Be the first to comment