Bulls Push Bitcoin Past $50,000 on MicroStrategy’s $600M Investment Narrative

Bitcoin crossed the $50,000-mark for the first time in history this Tuesday as bulls assessed the prospects of hundreds of millions of dollars worth of capital injection into the cryptocurrency’s market.

MicroStrategy, a Nasdaq-listed software management firm, announced that it intends to offer a $600 million aggregate principal amount of convertible senior notes due 2027 via a private sale to accredited institutional investors.

MicroStrategy now holds ~$3.5 billion in #Bitcoin

It has made $2.3 billion in profits on its holdings already and is hungry for more after it announced today it would raise an additional $650 million to buy more BTC. pic.twitter.com/JcaMYVffQf

— Ryan Watkins (@RyanWatkins_) February 16, 2021

The company also presented the opportunity to purchase an additional $90 million worth of notes to investors who buy it in the first 13 days of the issuance.

“MicroStrategy intends to use the net proceeds from the sale of the notes to acquire additional bitcoins,” their press release confirmed.

Traders flocked into the Bitcoin market after MicroStrategy’s announcement, raising their bids for the benchmark cryptocurrency. As of 0730 New York time, the BTC/USD exchange rate had established a fresh record high of $50,645.

Nonetheless, Bitcoin pared a portion of those gains owing to a higher-degree of profit-taking above $50,000. As a result, the cryptocurrency slipped back below the level but remained well within its range for a potential retest.

“That spike was obviously caused by the over-leveraged market participants excited about MicroStrategy’s $600m news,” noted Edward Morra, an independent market analyst. “However, if I recall correctly – every time Microstrategy announced something bullish – price dipped short term. Still waiting for US session to show the way.”

More Stimulus, More Bullish Bitcoin

The risk-on sentiment remained healthy in the US as the stock market hinted to rally to another record high. That was mainly due to the prospects of additional stimulus from the government and fiscal support from the central bank that—since last March—has favored the bull case in the Bitcoin and stock market alike.

House Democrats stitched together a $1.9 trillion stimulus package as US President Joe Biden decided to take the proposal among public. In his US-wide tour, the Democratic leader wants citizens to pressure their Republican representatives to vote in favor of the bill.

“The fiscal stimulus package is looking like it will be on the larger side,” Seema Shah, chief strategist at Principal Global Advisors, told the Wall Street Journal. “The backdrop, if anything, has really improved. It has just firmed up what everyone was expecting.”

Yashu Gola

Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including CoinChapter, NewsBTC, FxDailyReport, Bitcoinist, and CCN. Academically, Yashu holds a bachelor's in information technology, with majors in data structures and C++ programming language. He has also won the 'Atulya Award' for his efforts towards raising $100,000 for an India-based farming project.