Key Takeaway
- Microstrategy Inc. acquires 5,262 BTC for $561 million
- Acquisition funded by issuance and sale of shares under an October Sales Agreement
- XRP eyes solace at $2 after steady recline from local high with $1.5 next possible supply liquidity zone
Microstrategy Incorporated announced on December 23, 2024, that it has purchased an additional 5,262 BTC worth $561 million at an average price of $106,662 per Bitcoin. This brings the company's Bitcoin holdings to 442,262 BTC purchased at about $27.7 billion (inclusive of fees and other expenses) at an average price of $62,257.
In a recent filling with the Securities and Exchange Commission, the company stated that this purchase was made during the period between December 16, 2024 and December 22, 2024 and the cost - up to $561 million, was funded from the net proceeds from the issuance and sale of the some of the shares of the company's Class A common stock pursuant to an extant Sales Agreement entered between Microstrategy Inc. and several other companies.
Microstrategy Inc. earlier disclosed that it entered this Sales Agreement with TD Securities LLC, Barclays Capital Inc., The Benchmark Company, among others as agents. In this Sales Agreement, Microstrategy may issue and sell shares of its Class A common stock at a price of $0.001 per share, with an aggregate offering price of $21 billion.
Pursuant to this Sales Agreement, Microstrategy issued and sold about 1,317,841 shares of its Class A common stock from December 16, 2024 to December 22, 2024. After sales commissions, an aggregate of $561 million was realized in net proceeds from this sale. This net proceeds of $561 million was used to finance the company's latest BTC acquisition.
After its latest sale, Microstrategy Inc., under the Sales Agreement entered on October 30, 2024, still has $7 billion worth of shares that can be issued and sold. So far, the company has also recorded a Year-to-Day gain of 73.7% from its bitcoin strategy.
Meanwhile, Ripple's XRP has continued to suffer a steady decline after reaching a local top of $2.9 earlier in December. XRP had gone on a nearly one month rampage, climbing up from $0.5 in mid-November to a little of $2.9 in December. This came after a perceived triumph in Ripple's long-lasting litigation with the SEC which lasted for about four years.
XRP-USD daily chart
Source: Tradingview
Since reaching the highs of $2.9 in December, XRP has continued to stutter, giving up about 25% of its gains as it currently hovers around $2.155. It looks to be headed for the liquidity zone around the $2 area, with bulls hoping to get some rejection there and a chance to push higher. This zone has shown resilience on a previous occasion, pushing the price back above $2.5.
In the event of a larger sell pressure than the $2 support can carry, the next zone of interest is around the $1.3 - $1.5 area that has not been revisited since XRP surpassed it November. This zone looks to hold fare more liquidity than the $2 zone and will present a good buying opportunity for the short to medium term if price reaches there (THIS IS NOT FINANCIAL ADVISE).
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