March 19, 2024

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MicroStrategy Boosts Bitcoin Holdings with $623 Million Purchase, Surpasses 214,000 BTC

MicroStrategy (MSTR), under the leadership of Executive Chairman Michael Saylor, has increased its Bitcoin holdings by purchasing an additional 9,245 BTC at approximately $67,400 per coin, totaling $623 million. This acquisition was financed through $592.3 million from a recent convertible debt offering and $30.7 million in excess cash. With this purchase, MicroStrategy's total Bitcoin inventory reaches approximately 214,246 BTC, valued at $13.5 billion, representing more than 1% of the finite 21 million Bitcoin supply. The company's average acquisition cost across its Bitcoin holdings is around $35,160 per coin. This move comes as Bitcoin prices dropped to around $63,000 and MicroStrategy's shares saw a more than 10% decrease in pre-market trading, significantly down from a recent record high.

World's Largest Pension Fund GPIF Explores Bitcoin Investment Amid Diversification Strategy

Japan's Government Pension Investment Fund (GPIF), the world's largest known pension fund with about 224.7 trillion yen (US$1.5 trillion) in assets, is exploring the inclusion of Bitcoin and other low-liquidity assets like gold and farmland in its investment portfolio. This initiative, announced on Tuesday, forms part of a five-year research endeavor aimed at innovating its investment strategy in light of economic, social changes, and rapid technological advancements. Although the fund is currently in the preliminary stages of data collection and not yet indicating a direct move towards investing in Bitcoin, the inquiry reflects a broader interest in diversifying into unconventional asset classes amid Bitcoin’s recent performance, including a significant price increase year-to-date.

Grab Integrates Crypto Top-ups in Singapore, Explores Web3 and CBDC Pilots

Grab, Southeast Asia's leading ride-hailing app, has partnered with Triple-A to introduce a feature allowing Singapore users to top up their GrabPay Wallets with cryptocurrencies, including Bitcoin, Ether, and stablecoins such as XSGD, USDC, and USDT. This integration provides users with greater flexibility by converting digital assets into funds usable within Grab's extensive service range, initially exclusive to Singapore. The company is assessing user demand to possibly expand these crypto payment options. Additionally, Grab is exploring web3 integrations, including non-fungible token wallets and participating in a pilot study with the Monetary Authority of Singapore to examine digital asset usability, including CBDCs, tokenized bank deposits, and stablecoins.

Trading Desk Insights

In the trading sphere, Bitcoin experienced an 8% decline post the US equity market's close, underpinned by short-term traders—those holding positions for less than five months—capitalizing on significant profits. This activity was highlighted by substantial sell orders totaling $55 million on BitMEX, which pushed Bitcoin's price down to $8,900 around 22:40 UTC, though it swiftly rebounded within the next 10 minutes. From a technical perspective, the 4-hour chart demonstrates a bounce back from the 50% Fibonacci retracement level, indicating a potential local bottom.

The ETHBTC pair saw a 13% reduction from its March 8 peak, attributed to Ethereum's heightened sensitivity to volatile market conditions. This presents an enticing opportunity for long-term investors banking on Ethereum's potential to outperform Bitcoin moving forward.

ETF market dynamics revealed a series of net outflows amounting to $154.4 million, marking the first such movement since March 1. Notably, Grayscale experienced record outflows reaching $642.5 million, a concerning sign for market optimists.

In the realm of meme cryptocurrencies, average losses exceeded 17%, with dogwifhat (WIF) and floki (FLOKI) enduring downturns of around 18%. Conversely, BONK is making a robust recovery from its 50-day moving average, suggesting a potentially lucrative buying point.

Turning to equity futures, a downturn was observed on Tuesday as the market digested Nvidia's AI conference announcements and anticipated the Federal Reserve's monetary policy direction, with a two-day policy meeting commencing today. Recent inflation reports have heightened worries about prolonged elevated interest rates, though fed funds futures currently indicate a 99% probability of the Fed maintaining the status quo on benchmark interest rates this week.

In a significant policy shift, the Bank of Japan terminated its unique negative interest rates policy and abandoned yield-curve control alongside most of its asset purchasing strategies aimed at easing. For the first time since 2007, it adjusted its short-term interest rates to 0%-0.1% from -0.1%, marking a historic pivot in its monetary policy stance.

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Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.

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