Bitcoin edged higher on Thursday following MicroStrategy Inc.’s announcement of plans to issue more shares to fund further purchases of the digital currency, Bloomberg reports.
The move bolstered sentiment in the cryptocurrency market, with Bitcoin gaining 0.32% to $98,747 by late morning in Singapore, though it retreated from an intraday peak of $99,876.70.
MicroStrategy, known for its significant Bitcoin holdings, filed a proposal with the US Securities and Exchange Commission (SEC) on December 23 to increase its authorized shares of Class A common stock and preferred stock. If approved, this would enable the company to acquire more Bitcoin, reinforcing its position as one of the largest corporate holders of the cryptocurrency.
“The announcement that MicroStrategy will issue more shares next year to buy more Bitcoin is pushing up the prices,” explained Sean McNulty, director of trading at Arbelos Markets. “The market is being forward-looking about MicroStrategy’s Bitcoin buys, and that’s been the single biggest reason for the market to go up.”
Earlier this week, MicroStrategy revealed it had purchased an additional $561 million worth of Bitcoin at an average price near the recent record high, marking the seventh consecutive week of acquisitions.
The positive news surrounding Bitcoin had a ripple effect on the broader cryptocurrency market. A composite index tracking tokens such as Ether, Solana, and Dogecoin rose 0.2%, recovering from Wednesday’s losses.
Bitcoin’s year-to-date performance remains robust, with the asset gaining 135% so far in 2023, significantly outperforming traditional investments like global stocks and gold.
Despite the recent gains, traders remain cautious about potential market volatility. A record $43 billion in open interest for cryptocurrency derivatives, including $13.95 billion in Bitcoin options and $3.77 billion in Ether options, is set to expire on Friday on Deribit, the largest derivatives exchange in the sector.
“Market makers could unwind their hedges and short Bitcoin strikes, which might make it a choppy market on Friday,” McNulty added.
