• MicroStrategy and other whales continue to amass bitcoin

  • The following is an excerpt from a recent issue of the Deep Dive, Bitcoin Magazine’s premium markets newsletter. Subscribe now to be among the first to receive these insights and other on-chain bitcoin market analysis directly in your inbox.

    Relentless Bitcoin Accumulation by MicroStrategy

    MicroStrategy has purchased an additional 5,050 bitcoin for $242.9 million in cash at an average price of $48,099 per bitcoin, bringing the company’s total holdings to 114,042 bitcoin, according to Michael Saylor on Twitter today.

    Investors now own 1.3 million sats per MicroStrategy share, with 114,042 bitcoin and approximately 8.58 million shares outstanding, with the bitcoin per share up 2%. As MicroStrategy issues more common stock to fund their bitcoin buying spree, investors lose some ownership as equity dilution increases. In exchange, they will receive more bitcoin per share of MicroStrategy stock.

    MicroStrategy has sold an additional 793,232 shares for a total of $577 million in the last few weeks, as announced on August 24 and September 13. Their Open Market Sale Agreement, which they announced in July, allows them to sell up to $1 billion in new stock. So far, Michael Saylor has stuck to his original plan of purchasing as much bitcoin as possible using any and all financial vehicles at his disposal. And he doesn’t appear to be slowing down any time soon.

    MSTR shares have increased by 419.9 percent since the company adopted a bitcoin standard on August 11, 2020, outpacing the price of bitcoin, which has returned 279.0 percent during the same period.

    Whale Observation

    The amount of bitcoin held by whales increased by 67,195 bitcoin in September, totaling 6.13 million. This is a 3.1 percent increase from the year’s low in July, indicating increased demand from larger institutional buyers in the last two months. Whale supply includes entities with more than 1,000 bitcoin, excluding exchange balances and other known holdings such as GBTC. MicroStrategy’s latest 5,050 bitcoin account for 7.5 percent of this movement.

    When the bitcoin supply held by entities with balances of 1,000-10,000, 10,000-100,000, or more than 100,000 BTC is added up and exchange balances are subtracted from the metric, a clear picture emerges. Since February, both the total whale balance and the number of whale entities (entities being a heuristic labeling of a cluster of addresses associated with one another on the blockchain) have begun to decline; however, the BTC per whale has increased significantly.

    In layman’s terms, this means that despite the ups and downs of the market since February, a number of convicted whales have continued to accumulate, and following the summer price drop of more than 50%, the aggregate BTC balance held by whales has resumed its uptrend.

    TLDR: Total BTC holdings by whale entities and average BTC holdings per whale are both increasing. Right now, big money is buying. The figures don’t lie.

    Long-Term Holder Supply Maintains All-Time Highs

    The supply of bitcoin held by long-term holders continues to break all-time highs on a daily basis, with the cohort holding more than 2 million more bitcoin than on March 17, which was the low figure for 2021. This is unquestionably a bullish catalyst, demonstrating how strong-handed HODLers have been accumulating during the volatility of 2021.

    With the classification of long-term holders being 155 days (for reasons explained further below), the current date for a UTXO to be considered a “long-term” holder is April 11, 2021, just three days before the bitcoin market’s local top. Despite this, long-term investors have never held more bitcoin. Extremely optimistic.

    Because of the statistical significance of the data when backtesting UTXO spend probabilities, the time threshold for a bitcoin balance to be considered “long-term” is 155 days. Read on for more information on the quantification of long-term versus short-term holders.

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