Written by: iambabywhale.eth

Last year, the bull market of cryptocurrencies attracted a lot of listed companies in the US stock market. Elon Musk also changed from calling for US stocks to calling for bitcoins. Listed companies such as Tesla also bought a lot of bitcoins in addition to their main business. However, the sharp decline in the market this year has led to these companies' 2021 annual reports and 2022 first-quarter reports accruing impairments of over 100 million US dollars. In addition, some bitcoin mining companies that have expressed a "hodl" attitude that went public last year have also begun to express their intention to sell some bitcoins. MicroStrategy seems to be the only listed company that still says that it will not sell any bitcoins.

But is this software company that has almost turned the purchase of Bitcoin into its main business, has it really not sold Bitcoin as it said? Some clues on the chain make us question this.

MicroStrategy's Bitcoin Accumulation Road

MicroStrategy announced its financial report for the first quarter of 2022 on May 3, Beijing time. The financial report shows that the company currently holds a total of 129,218 bitcoins at an average cost of $30,700. In the first quarter, the company once again made a $170.1 million bitcoin impairment provision, resulting in a loss of $130.8 million for the quarter.

The news of MicroStrategy’s public purchase of Bitcoin can be traced back to August 11, 2020. At that time, MicroStrategy stated that it had spent $250 million to purchase 21,454 Bitcoins based on the asset allocation strategy formulated in its second quarter 2020 financial report. . After announcing in mid-September 2020 that it would purchase 16,796 bitcoins again for US$175 million and stated that it would use bitcoins as its main reserve asset, MicroStrategy began an uncontrollable increase in holdings. The author organizes the records of MicroStrategy’s purchase of Bitcoin so far as follows:

According to the masters on the Okeyun chainInstitutional position dataIt shows that aside from the exchange as the custodian, among the company entities currently holding more than 100,000 bitcoins, in addition to Block.one and the long-defunct Mt.Gox, MicroStrategy ranks third.

Is "never sold" true?

articlearticleAs mentioned, a MicroStrategy filing with the SEC in August 2021 showed that its chief financial officer and chief technology officer sold $7 million worth of stock in July, and the top eight executives in Crypto in just one year. Domain proceeds are expected to be approximately $175 million.

Crypto KOL Whale said that MicroStrategy CEO Michael Saylor and other executives may be implementing a "pump-and-dump" strategy. Whale speculated that MicroStrategy transferred its bitcoin holdings to another limited liability company for sale. No disclosure to the SEC is required.

Last month, a Twitter user found out that MicroStrategy was secretly selling bitcoin through a suspected holding address of MicroStrategy. The user said that MicroStrategy’s main custody address is 1P5ZEDWTKTFGxQjZphgWPQUpe554WKDfHQ, and another custody address is 1FzWLkAahHooV3kzTgyx6qsswXJ6sCXkSR. When selling, MicroStrategy will transfer bitcoins from the main address to the second address and sell them through Coinbase and OKX. If these two addresses are really MicroStrategy holding addresses, then they have sold more than 8,000 bitcoins so far.

Subsequently, MicroStrategy CEO Michael Saylor denied the speculation and said that as a listed company, any changes in Bitcoin positions must be disclosed.

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Statistics on position changes of this address, source: OKLink

But some opponents have questioned this. On the one hand, this address has been increasing holdings since 2019, not in August 2020 as first announced by MicroStrategy; on the other hand, this address is not a multi-signature address. The address is more like the personal address of a Bitcoin whale.

The author found through its 2021 annual report that MicroStrategy did not generate non-operating income such as the sale of fixed assets in 2021, but it is still doubtful whether the audit company can find that MicroStrategy sold Bitcoin.

Overall, as far as the financial report is concerned, MicroStrategy's current main business does not have the ability to repay billions of dollars in debt, and the increasingly high leverage in buying Bitcoin will eventually force it to sell a part of Bitcoin in the future. Mitigate risk and never sell is likely largely a gimmick. But as for whether there has been a sale of Bitcoin in the past two years, it will always be "Schrödinger's cat" before it announces the holding address.

The cryptocurrency bull market since 2020 has led to the entry of a large number of institutions in the traditional financial and technological fields. Bitcoin was once widely regarded as "digital gold", and it also made institutions regard it as a "good medicine" for rich asset allocation to hedge against risks in traditional financial markets . However, since the beginning of this year, Bitcoin has shown a high correlation with US stocks, and its risk-hedging attributes are constantly weakening. Although it is still unclear whether the "faith" of new institutional investors will loosen in such an environment, the remarks that institutions only buy and not sell as the long-term fundamental support of Bitcoin may need to be reconsidered.