When it comes to crypto assets, holding onto them when the bear market is in full swing is a difficult pill to digest. After all, the old adage of buying low and selling high is no longer an effective strategy in this kind of volatile market, as of now.
Take into consideration, that two of the largest publicly listed corporations’ bag holders have lost about $2 billion in Bitcoin (BTC) purchases.
The 130,000 and 43,000 Bitcoin owned by Microstrategy and Tesla, respectively, are worth substantially less, according to Bitcointreasuries.net.
Michael Saylor spent about $4 billion ($3,965,863,658 to be exact) for 129,218 BTC for Microstrategy, accounting for almost 0.615 % of the total supply of Bitcoin.
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How Bad Is The Damage?
The Bitcoin price drop has wiped out all previous gains.
The investment is now plummeted to $3.1 billion ($3,074,987,824)—a substantial loss of $900 million. Microstrategy stock (MSTR) also plunged to its lowest levels in months in premarket trade on Monday.
Elon Musk’s $1 billion profit has evaporated after his Tesla car firm purchased over 40,000 Bitcoin during the 2021 bull market. The $1.5 billion net value for 43,200 BTC, or 0.206 % Bitcoin supply, is now valued $1 billion ($1,017,789,280), a $500 million decrease.
The cumulative loss shared by these two rich Bitcoin enthusiasts is around $1.4 billion. Since both firms are publicly listed, the July quarterly reports will reveal how much each company is losing on its Bitcoin assets.
In the month of November of 2021, Bitcoin’s market worth temporarily eclipsed Tesla’s. Bitcoin has received less than half a trillion dollars in investment, whereas Tesla has garnered $721 billion. For the first time, the total value of all cryptocurrencies has gone below $1 trillion.
The situation at Microstrategy has deteriorated significantly in recent days. Saylor will be required to make loan repayments as soon as the price of bitcoin exceeds $21,000.
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After apologizing to investors, Saylor stated that the company’s $205 million loans were guaranteed by $410,000 in extra security. If the price of bitcoin does not move for an extended length of time, Microstrategy may decide to spend some of its more than 115,000 BTC in cash.
If Celsius’s “insolvency” has a knock-on effect and spreads, there might be a lot more misery in the future. According to Tahini’s, one of the first eateries to take Bitcoin as payment, these resources will continue to be obtained at far reduced costs, as some Bitcoin supporters predict.
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