United We Stand, Divided We Fall: Two Bitcoin Giants are Facing Billions in Unrealized Losses
If there is one word that describes Bitcoin and cryptocurrency, it is ‘volatility’. Cryptocurrency prices soar and then fall just as quickly, while rumours, sentiment and fundamental events are quickly factored in by the market. In just four days in early June, Bitcoin fell from $30,500 to $23,500, a drop of almost 23%.
Undoubtedly, the bear market upsets all crypto enthusiasts but the two largest institutional Bitcoin holders have been particularly distinguished. They lost "on paper" a total of almost $1.5 billion.
In This Together…?
According to the analytical resource Bitcointreasuries.net, almost 130,000 Bitcoins owned by Microstrategy and 43,200 Bitcoins owned by Tesla made their owners significantly poorer (however, we are talking about an unrealized loss).
MicroStrategy CEO Michael Saylor spent almost $4 billion on 129,218 BTC, which is approximately 0.615% of the total issuance of the first cryptocurrency. The fall in the price of Bitcoin depreciated the company's investment to $3.1 billion, thus the loss amounted to $900 million. In addition, on Monday, shares of Microstrategy (MSTR) fell to their lowest levels in recent months.
The largest institutional holders of Bitcoin according to Bitcointreasuries.net
The investment of Elon Mask, whose car company Tesla bought more than 40,000 Bitcoins during the 2021 bull market, has also taken a big hit. He lost about $500 million on his investments.
The total impairment loss of the two true bitcoin-believing billionaires is approximately $1.4 billion. Given that both companies are publicly traded, the July quarterly reports will show the real numbers.
- Impairment is the term used to explain a sudden decline in the value of an asset.
At one point in November last year, Bitcoin managed to surpass Tesla’s market capitalization. Tesla currently has a market capitalization of approximately $721 billion, while Bitcoin's capitalization is hovering in the region of less than half a trillion dollars. The total capitalization of the entire crypto market following today's fall is less than one trillion dollars.
MicroStrategy, which has taken out a Bitcoin loan to buy Bitcoins, has an even bleaker situation. If the Bitcoin price falls to $22,000, Saylor will start selling the Bitcoins to meet the terms of the loan agreement. Or he will have to find a way to replenish his collateral.
Bitcoin at NAGAX
It's been a tough few months for crypto investors, and many want to know if the end is in sight. The leading cryptocurrency, Bitcoin (BTC), has fallen more than 50% from its November all-time high, and other cryptocurrencies have lost even more.
Investors in the cryptocurrency market are having a tough time with heightened volatility and strong selling pressure as the bears have tightened their grip on the market.
Bear markets can be challenging for investors, but they can be seen as a good investment opportunity to buy at lower prices.
NAGAX is a safe, easy-to-use platform where you can buy cryptocurrencies, such as Bitcoin and many more. Buy, HODL and sell crypto with NAGAX today!
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