However, there are more things going on in the market for bitcoin.
Microstrategy(NASDAQ: MSTR) sold securities to buy more bitcoin
In an official statement on Monday, MicroStrategy (NASDAQ:MSTR) disclosed that it had completed the sales of secured notes due 2028, raising approximately $488 million, all of which the business intelligence company will use to acquire more Bitcoin.
Institutional investors were keen on the offer, with MicroStrategy reportedly receiving more than $1.5 billion in orders, while its shares surged by over 15% following the announcement, suggesting investors are still bullish on the future of Bitcoin despite the recent market correction.
MicroStrategy said in a securities filing on Monday that it raised $488 million from its bond sale, an increase from the $400 million it initially planned. The funds will be used to purchase additional bitcoin.
The company has been a longtime investor in the cryptocurrency, and this was its third bond sale to purchase bitcoins in less than a year.
“That [MicroStrategy offering] is going to be a massive upward price catalyst because $488 million is a lot of inflow,” said Meltem Demirors, chief strategy officer at London-based asset management firm CoinShares. “Traders are going to position themselves around that event because they know there is going to be volatility.”
Despite recent volatility, Ms. Demirors said she expects longtime investors in bitcoin to hold on to their positions for the long term. Trading in bitcoin has been relatively rangebound in recent weeks. She expects that could continue and that, by fall, bitcoin could possibly return to record highs of more than $60,000 apiece. The cryptocurrency had lost around 40% of its value after peaking this spring.
El Salvador announcing its adoption of Bitcoin as legal tender
Adding to the bullish sentiment, and fresh on the back of El Salvador announcing its adoption of Bitcoin as legal tender, the president of Tanzania Samia Suluhu Hassan told the East African nation’s financial chiefs to prepare for the wider adoption of cryptocurrency around the world, while the Texas Department of Banking issued a notice last week confirming that state-chartered banks could hold Bitcoin.
At the same time, Bitcoin is being improved, with the first upgrade in four years having just been approved by miners around the world.
The upgrade is called Taproot, and it’s due to take effect in November. It should result in greater transaction privacy and efficiency, and crucially, it will unlock the potential for smart contracts, a key feature of its blockchain technology which eliminates middlemen from even the most complex transactions.
Bitcoin under environmental spotlight
The environmental impact of bitcoin mining has come under intense scrutiny.
As part of its crackdown on bitcoin, China’s Inner Mongolia region a major bitcoin mining hub in late-May proposed punishments for companies and individuals involved in digital currency mining. It came after Chinese Vice Premier Liu He said it is necessary to “crack down on Bitcoin mining and trading behavior” to prevent the “transmission of individual risks to the social field.”
Elsewhere, Iran’s government in announced in May a ban on the mining of bitcoin and other cryptocurrencies until Sept. 22, after officials said blackouts in the country’s capital of Tehran and several other large cities were in part due to the energy-intensive activity.
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