K33 Analyzes Slowdown in Strategy’s Bitcoin Purchases

Strategy continues to acquire the leading cryptocurrency, yet the pace of purchases has slowed since the peak in November, noted K33.

From May 19 to 25, the firm acquired 4020 BTC for $427.1 million. The average purchase price was $106,237. The company raised $348.7 million through its $21 billion at-the-market (ATM) MSTR share sale program. This is less than the $705.7 million the previous week and $1.31 billion from May 5 to 11.

The slowdown is attributed to a reduction in the premium of Strategy’s (MSTR) shares over its bitcoin reserves and increased competition in the corporate cryptocurrency accumulation sector. This view was expressed by K33’s head of research, Vetle Lunde.

“The use of the new $21 billion ATM program is significantly slower than the first similar program,” the expert noted.

According to his data, from November 4 to December 16, MSTR raised an average of $2.13 billion weekly through ATM. Over the past three weeks, this figure has been $788 million.

Competition from other companies investing in bitcoin is growing. More than 70 firms now hold BTC in reserves. Following the example of Metaplanet, Semler Scientific, and KULR, Twenty One Capital and Nakamoto have recently joined this strategy.

On May 27, Trump Media & Technology Group also announced the launch of a corporate bitcoin strategy, raising $2.5 billion from around 50 institutional investors.

“This gives traders more options for investing in companies with bitcoin reserves, which may reduce demand for MSTR,” Lunde explained.

The premium of MSTR shares over the value of its crypto assets has also decreased. Over the past week, it fell from 185% to 163%, reaching lows not seen since April 8.

“Active capital dilution [through share sales] accelerates the reduction of premiums. This may force MSTR to conduct more moderate placements through ATM than those observed in November, when premiums rose despite aggressive dilution,” the expert added.

At the time of writing, Strategy holds 580,250 BTC with a total value exceeding $63.3 billion. The average purchase price is $69,979, and total expenditures are around $40.6 billion.

The company’s assets constitute more than 2.75% of bitcoin’s maximum supply of 21 million coins. Strategy’s unrealized profit is approximately $23 billion at the current asset price of about $109,000.

According to Lunde, bitcoin is trading at historical highs, but signs of euphoria in the spot and derivatives markets remain moderate. The excitement, he says, is mainly observed around companies holding bitcoin in reserves.

However, with the exception of MSTR, most of them occupy a relatively small niche in the global BTC market and “do not pose a significant impending threat to the strong momentum of the leading cryptocurrency,” the analyst believes.

In the first quarter, Strategy earned $5.8 billion from bitcoin. However, the company’s loss exceeded $4 billion.

On May 19, Strategy was accused of “false or misleading statements” about the profitability of its bitcoin strategy and concealing the risks of asset volatility.