Big Bitcoin Bets Burn This Firm: What’s Next for the Cryptocurrency?
MicroStrategy executive remains bullish on Bitcoin – mentions “ideal entry point”
by Bob Stokes
Updated: August 09, 2022
Big bets on a hot financial market can be rewarding, but you know the flip side.
These sizzling markets can just as quickly severely punish because they have a way of cooling off just when nearly everyone is convinced that the market will get even hotter.
Consider MicroStrategy, a software firm which borrowed money to invest in Bitcoin.
So far, things haven't worked out so well. Here's an August 3 Marketwatch headline:
MicroStrategy racks up $1 billion loss, says CEO will leave that post
That loss was due almost entirely to its investment in Bitcoin and occurred in Q2 -- cumulatively, MicroStrategy has racked up around $2 billion in Bitcoin losses.
These losses are mentioned as an update to our January Global Market Perspective coverage:
The chart shows the long-term trend in the largest corporate holder of bitcoin, MicroStrategy Inc. At this point, MicroStrategy is down 62% from a countertrend rally top in February 2021... The Global Market Perspective issued [a] reversal warning in April 2021 based on the latest change of trend in MicroStrategy's share price: "The huge looming thing is how common these reversals of fortune are going to become."
At the time of that Global Market Perspective coverage of more than six months ago, MicroStrategy had already raised its Bitcoin holdings to $5.9 billion (as of Dec. 30, 2021).
Despite the loss, MicroStrategy is not backing off its bullish view of Bitcoin with the CEO saying in an early August interview that this is an ideal entry point to buy Bitcoin.
Of course, only time will tell if the CEO turns out to be right or wrong. All the while, Bitcoin's Elliott wave pattern is revealing its own message.
Our just-published August Global Market Perspective provides a clearly labeled Elliott wave chart of Bitcoin, along with video commentary, in the "Cryptocurrency" section. In that section, you'll find Elliott wave analysis of Ethereum, XRP and other cryptocurrencies.
Tap into our latest coverage of cryptocurrencies, global stock markets, bonds, precious metals, crude oil, forex and much more by following the link below.
Enjoy the Peace of Mind That Comes from Financial Safety
Who says you must always be invested in risk-assets?
When you hear someone say this, run the other way.
In Elliott Wave International's view, this advice is unsound -- whether it's described as "stocks for the long run," or "diversify your portfolio," etc.
Yes, when a specific financial opportunity presents itself, it can be wise to embrace it. Yet it's just as important to know when to be out of risky markets.
Learn what Elliott Wave International's global analysts have to say about an array of risk-assets in the U.S., Asian-Pacific and Europe.
Get coverage of cryptocurrencies, global stocks, bonds, crude oil, forex, metals -- and much more (including global economies) -- by following the link below.
Global Market Perspective
Gives you clear and actionable analysis and forecasts for the world’s major financial markets.
Get insights for the U.S., European and Asian-Pacific main stock indexes, precious metals, forex pairs, cryptos (including Bitcoin), global interest rates, energy markets, cultural trends and more.
"Things will change over the course of the next few years," says our Financial Forecast co-editor Pete Kendall in this new interview. Hear it for yourself.
September saw tech giant Microsoft Corp. in freefall, a rout ending September 30 at the stock's lowest level since March 2021. Oddly enough, the decline occurred amidst "fantastic" figures of growth and productivity. If you can answer the question, "Why did prices fall despite bullish 'fundamentals?'" you've got the job!
The Asian-Pacific stock markets have been showing a clear correlation with the trend in the U.S. dollar. Watch our Asian-Pacific Short Term Update editor Chris Carolan explain why right now, it's a "very dangerous" moment for the regional stocks.