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MicroStrategy Boosts Bitcoin Holdings to 439,000 BTC Following Nasdaq 100 Inclusion

MicroStrategy has increased its bitcoin holdings to a total of 439,000 BTC following its latest purchase of 15,350 BTC.

Disclaimer: The analyst who wrote this piece owns shares of MicroStrategy (MSTR) and Semler Scientific (SMLR).

Self-described bitcoin (BTC) development company MicroStrategy (MSTR) has increased its bitcoin holdings to a total of 439,000 BTC following its latest purchase of 15,350 BTC with the acquisition finishing on Dec. 15.

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MicroStrategy disclosed that the 15,350 BTC purchase came to a total of $1.5 billion for an average price of $100,386 per bitcoin. This brings the company’s total holdings to 439,000 BTC worth $45.6 billion at current market prices. The company’s overall average purchase price is $61,725 per bitcoin.

The latest acquisition purchases was funded through share sales under the company’s at-the-market (ATM) program. Before the announcement, MicroStrategy had $9.19 billion left of the ATM offering. Following the announcement, the company now has $7.65 billion left, according to the latest filing.

Once again, Executive Chairman, Michael Saylor teased the Monday announcement with a Sunday post.

This is now a multi week trend that MicroStrategy has announced a bitcoin purchase on a Monday before the U.S. market opens. In the previous five weeks MicroStrategy has purchased 171,430 BTC for $15.61 billion, according to an X post, by @LuckyXBT__. This current ATM offering is still part of MicroStrategy’s well-known “21/21 plan”. While, the company still has $18 billion left of convertible note offerings, of which only $3 billion has been used so far, according to LuckyXBT.

This announcement follows Friday’s news of MicroStrategy entering the Nasdaq 100, with the index’s re-shuffling going into effect on Dec. 23.

In addition, the Financial Accounting Standards Board (FASB) has officially adopted fair value accounting for bitcoin and other digital assets for fiscal years after Dec. 15 2024, which passed in 2023.

This means that digital assets will be able to account for using fair value measurement, which allows companies to recognize both fair value gains and impairments on their bitcoin holdings in net income. Under the previous rules, companies could only record impairments if that asset’s value dropped below its purchase price, but they could not record any gains seen if the asset increased above the purchase price.

Following the news of both the Nasdaq 100 inclusion and recent bitcoin purchase, MicroStrategy’s share price is up 4% in pre-market trading at $425 a share. While, bitcoin is trading over $104,000, after recently setting an all-time high over $106,000.

Semler Scientific (SMLR) also acquired more bitcoin, 211 BTC for $421.5 million at $101,890 per bitcoin. As of Dec. 12, Semler Scientific holds 2,084 BTC. In addition, Semler Scientific filed a second prospectus supplement to its S-3 Shelf, increasing its ATM offering by a further $50 million, taking the total offering to $150 million.

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Bitcoin Holder Semler Scientific’s Shares Now Available for Options Trading

The medical device company adopted a bitcoin treasury strategy earlier this year and currently holds 2,084 tokens worth roughly $220 million.

The analyst who wrote this piece owns shares of Semler Scientific (SMLR) and MicroStrategy (MSTR).

Shares of Semler Scientific (SMLR), the small-cap medical device maker that adopted a bitcoin treasury strategy earlier this year, are now available for options trading.

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This comes after six months of share-price growth for the company driven by its bitcoin (BTC) pivot and capital-raising initiatives. Semler had requested approval on Dec. 5 from options exchanges to allow options trading as the company believed it met the eligibility requirements.

Though no official announcement has been made, a check of brokerage accounts Tuesday morning U.S. hours showed the options as available to trade.

Options are financial contracts that give the investor the right, but not the obligation, to buy or sell a stock at a specified price before a certain date. The introduction of options on a stock gives investors new tools to hedge risk and speculate on price movements.

Among the requirements needed for an options market to be granted are a minimum share price of around $3-$5, a minimum market capitalization of at least $75 million and sufficient trading volume of around 500,000 to 1 million shares per day. Additionally, a minimum number of publicly available shares and sufficient number of shareholders are required.

Semler’s stock price has almost tripled to more than $74 as of Monday’s close since making public its initial bitcoin purchases on May 28. It has a market cap topping $600 million. SMLR is ahead 5% in premarket action Tuesday to $78.20.

The company recently filed a second prospectus supplement under its S-3 Shelf, which has seen an additional $50 million in share offerings under its existing at-the-market (ATM) program, increasing the total offering to $150 million. To date, the company has raised approximately $100 million in proceeds through ATM issuance.

Semler to date has acquired 2,084 bitcoin for $168.6 million, or an average price of about $81,000 each. Those holdings are worth about $222 million at bitcoin’s recent price of roughly $106,500.

Semler may be looking to recreate the success mammoth bitcoin holder MicroStrategy (MSTR) has achieved through the issuance of convertible notes to raise capital for accumulating more tokens. By not causing immediate dilution of existing shares, convertible offerings can be a more attractive way than share offerings to raise cash. The active options market Semler is hoping for allows investors an easy way to hedge, thus making convertible paper more attractive to potential buyers.

Disclaimer: This article, or parts of it, was generated with assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.

How MicroStrategy and Others Are Taking on Billions in Debt to Buy More Bitcoin

Michael Saylor has raised $6 billion in convertible bonds, with $18 billion more to come. His strategy is unprecedented — here’s how it works.

Have Michael Saylor and MicroStrategy (MSTR) stumbled onto an infinite money glitch?

It would be hard to blame anyone for thinking so. While the Saylor-led company began buying bitcoin (BTC) more than four years ago, over the past 10 months MicroStrategy has used a unique strategy to raise over $6 billion for the express purpose of adding more bitcoin to its balance sheet, which as of Dec. 15 footed to 439,000 tokens worth $46 billion at the current price of about $106,000.

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MicroStrategy did not raise these funds by taking out loans or by issuing more company shares (though it has separately issued billions of dollars worth of equity). Rather, the firm sold convertible notes — debt securities which can be converted into equity on specified dates or under special conditions. And it’s not done yet: Saylor and company intend to raise at least another $18 billion through such bonds over the course of the next three years, according to a plan laid out in October.

Demand for this convertible paper has been so high that other companies, bitcoin miner MARA Holdings (MARA) among them, have adopted a similar playbook to raise billions to add to their own stacks.

But that raises a question: Could issuing so much debt eventually become dangerous for these firms, and for the crypto market at large?

“If bitcoin faces a prolonged period of low/declining prices, [the companies] could have to issue more equity and dilute shareholders at an inopportune time … [or] sell the bitcoin for less than they bought,” Quinn Thompson, founder of crypto hedge fund Lekker Capital, told CoinDesk. Thompson added, though, that he doesn’t expect the companies to become insolvent.

How convertible notes work

Convertible notes are a financial tool that allows companies to quickly raise funds without needing to provide collateral (as they would for a loan) or to immediately dilute their stock. These bonds are priced based on the interest rate baked into them, the firm’s underlying stock, the volatility of that stock and the firm’s credit worthiness.

For example, in November bitcoin mining firm Bitdeer (BTDR) raised $360 million by issuing convertible notes with an interest rate of 5.25%. These will mature on Dec. 1, 2029 at a price of $15.95 per share — which is approximately 42.5% higher than what these shares were trading for on Nov. 21 when the convertible notes were priced.

In other words, instead of simply buying the company’s shares on the open market, investors can earn a solid yield by holding these notes while also benefitting if the stock surges. Even better, convertible notes come with downside protection. On specific dates, such bonds can be redeemed in cash for an amount equal to the original investment plus interest payments. Put differently, investors are almost guaranteed to get their money back even if the stock plunges before the note matures.

But MicroStrategy’s situation is rather unheard of in that the firm has found demand for convertible bonds at a 0% interest rate even though benchmark U.S. interest rates are closer to 5%. Why? Volatility. Being essentially a leveraged play on bitcoin, MicroStrategy common stock most recently has been trading with a 30-day average implied volatility of 106 and prior to that even higher. For comparison, the S&P 500 usually trades at roughly 15 in implied volatility, and bitcoin at 60.

The stock volatility affects price action in MSTR’s convertible bonds and sophisticated market participants are able to score sizable profits by trading that volatility in a market neutral fashion. “I was on the phone with a convertible note [arbitrage] trader… just to sort of understand what he’s going through with all of this,” Richard Byworth, a convertible bond expert and managing partner at asset management firm Syz Capital, told the On The Margin podcast. “He said ‘Rich, I’ve become a degen crypto trader. … It’s insane. I go to the bathroom, if I haven’t tightened up all my deltas and at least left some limits, I can come back and have millions of dollars of exposure.’ This stuff is whipping around like crazy.”

There’s thus a huge demand for MicroStrategy’s convertible notes, and that has allowed the firm to sell a ton of them — five issuances in a year, which is unprecedented. At press time, the company had six outstanding convertible notes, with maturations between 2027 and 2032. Two of these have 0% interest rates, while two others yield 0.625%, a fifth 0.875% and the last one 2.25%. Because these rates are so low, MicroStrategy is managing to sell equity at a massive premium compared to its current stock price, while only paying a blended 0.811% interest rate on its debt, or $35 million annually, an amount easily covered by the firm’s revenue.

“Should implied volatility remain high, I bet MSTR sells more and more convertible bonds… meaning they buy more and more bitcoin,” Greg Magadini, director of derivatives at crypto data firm Amberdata, told CoinDesk. “To me the first sign of a bitcoin rally “TOP” will coincide with a drop in MSTR implied volatility.”

Convertible notes mania

In addition to the above-mentioned bitcoin miners, there’s medical device company Semler Scientific (SMLR), which made public its bitcoin treasury strategy in late May. While the firm to date has only purchased bitcoin with cash already on its balance sheet and capital raised through share sales, its stock was granted an options market on Tuesday, which will make note offerings much more attractive to investors and traders looking to profit in similar fashion to that of MicroStrategy’s debt.

Bitcoin miners took on roughly $5.2 billion in debt from June to Dec. 5 alone, according to the MinerMag. Some of these convertible notes have been issued with 0% interest in the case of MARA and Core Scientific, while others like Bitdeer, IREN (IREN) and TeraWulf (WULF) have issued them at rates ranging from 2.75% to 8.5%.

Not every company is employing the strategy for the same reasons, however. MARA and Riot Platforms (RIOT) are walking in MicroStrategy’s footsteps by using the proceeds from the convertible notes to add more bitcoin to their balance sheet, but Core Scientific, for example, wants the funds for operating expenses, capital expenditures, and potential acquisitions. Bitdeer, meanwhile, said it aimed to further develop its mining rig manufacturing business.

Bill eventually comes due

Convertible notes, however, are not free money. As mentioned previously, once the notes reach full maturity, holders can decide to convert them for equity at an agreed-upon price per share, or redeem them for cash if the stock has underperformed expectations.

The danger, then, is that the stock prices of these various firms could drop significantly over a long period of time, incentivizing holders to redeem their notes for cash instead of shares. In MicroStrategy’s case, that could compel the company to sell some of its bitcoin holdings to pay investors back, while bitcoin mining firms could be forced to sell off various mining assets. In a worst case scenario, firms could end up facing bankruptcy.

Forced selling of bitcoin isn’t necessarily the end of the world, at least as long as the company’s average purchase price is lower than the price it sells at. MicroStrategy’s stash, for instance, was acquired for $61,725 per bitcoin on average, which gives the firm a certain amount of breathing space. The trouble is bitcoin is well known for plunging 80% every few years. Just this year — in the middle of a bull market — the price declined nearly 40% at one point, so there’s no guarantee the top cryptocurrency won’t ever sink lower than MicroStrategy’s average purchase price.

Even so, MicroStrategy’s bonds are staggered, meaning that they all have different maturation years. That reduces the company’s risk because it won’t need to repay all of that debt all at once. In other words, bitcoin and MSTR would need to stay down for a significant number of years for the firm’s situation to get really dicey. The fact that most of MicroStrategy’s notes already meet the requirements for conversion is another point in the company’s favor, and it always has the option of rolling over its debt by issuing new convertible bonds, even if they wouldn’t be on such favorable terms.

In a sense, MicroStrategy is a grizzled veteran of this strategy. It’s possible the newcomers like the bitcoin miners and maybe Semler (if it does choose to issue debt) — whose average bitcoin purchase prices will be far higher — could find themselves far more exposed, having taken on large liabilities closer to a potential cycle top.

Bitcoin Dips Below $98K While CoinDesk 20 Plunges 10% Amid Fed-Spurred Rout; SOL Surrenders Post-Election Rally

Fed Chair Jerome Powell’s hawkish comments Wednesday on rate cuts have rattled investors across asset classes.

Crypto asset prices slid on Thursday, building on Wednesday’s market-wide selloff spurred by Federal Reserve Chair Jerome Powell disappointing investors with his comments on U.S. interest rate cut expectations for next year.

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Bitcoin’s (BTC) attempt to bounce back above $100,000 quickly faded earlier during the day and slid to the low-$97,000s during the U.S. day. Recently, it modestly recovered to around $98,000, but was still down 4.8% over the past 24 hours.

Altcoins fared much worse, with the broad-market CoinDesk 20 Index diving more than 10% during the same period. Ethereum’s ether (ETH) dipped 10.8% to below $3,500, while Cardano’s ADA, Chainlink’s LINK, Aptos’ APT, Avalanche’s AVAX and Dogecoin’s DOGE all suffered 15%-20% losses. Notably, SOL sank to its weakest price since Nov. 7 — nearly erasing its post-election rally following a 26% plunge from its record high hit less than a month ago.

Over the past 24 hours — roughly since yesterday’s rate decision by Fed policy makers — nearly $1.2 billion worth of leveraged crypto derivatives trading positions have been liquidated across all assets, CoinGlass data shows. Over $1 billion of those were long positions, or bets that prices would rise.

In traditional markets, U.S. stock indexes slightly bounced from Wednesday’s lows but gave back part of the pre-market gains during the session. The S&P 500 and the tech-heavy Nasdaq were 0.5% up from the Wednesday close.

Crypto prices rose almost vertically since Donald Trump’s presidential election victory in early November, buoyed by hopes of pro-crypto policies from his incoming administration. Wednesday’s Fed projection of a slower pace of rate cuts for next year and Powell’s hawkish tone on rising inflation expectations caught many investors offside, triggering a broad-market selloff across crypto, equities and even gold.

The U.S. dollar index (DXY), a key strength gauge against a basket of foreign currencies, surged above 108, its strongest level since November 2022, while 10-year U.S. Treasury yields also rose sharply above 4.6%, the highest since May.

“The crypto market has already been on pins and needles around the possibility for a correction following the record run in the price of bitcoin through $100,000,” Joel Kruger, market strategist at LMAX Group, said in a Thursday note. “We got that catalyst from the world of traditional markets. … Fallout from Wednesday’s Fed decision was simply too much to ignore.”

“When you zoom out and consider the year-over-year growth, a pullback like this feels healthy,” Azeem Khan, co-founder and COO of layer-2 network Morph, said in an email shared with CoinDesk.

“It’s also worth noting that, historically, year-end selloffs in securities can occur as investors offset losses against gains to lower their tax liabilities,” Khan added. “While it’s hard to say how much of this is driving the current trend, it could be a contributing factor.”

A Single Pudgy Penguins NFT Now Costs More Than a Bitcoin

The comic penguin collection has become the world’s second most-valued set of NFTs, crossing the $100,000 mark for the first time.

The Pudgy Penguins NFT collection is keeping Web3 hopes afloat in a sea of dead NFT projects and a generally muted collectibles market.

The non-fungible token set became the world’s second most-valued NFTs on Wednesday, with the minimum — or floor — price for any of the 8,888 comic penguins topping $100,000 and flipping the collections’ value above its comic monkey forerunner, the Bored Apes Yacht Club.

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That means buying a single NFT now costs more than a bitcoin, which currently trades at just over $100,000.

The floor price has jumped 76% in the past seven days to over 26 ether (ETH), or just above $105,000. Bored Apes and CryptoPunks — the most valued NFTs — both fell 12% in the same period.

Demand for the NFTs surged after a CoinDesk exclusive on Pudgy Penguin’s plans to release a PENGU token on the Solana blockchain later this month. The token allocation strategy includes a substantial share for existing NFT holders, which may have incentivized current owners to hold or increase their investments, driving up demand.

Nearly a quarter — 23.5% — of the 88 billion PENGU tokens will be reserved for owners of the project’s NFT collections such as Pudgy Penguins, Lil Pudgys and Pudgy Rods. A further 22% will be available to the Solana and Ethereum communities, and 12% will be set aside to provide liquidity on decentralized exchanges.

In the NFT market, the floor price is the cheapest cost of an NFT within a specific collection. It is fixed by the NFT’s owner based on market forces such as demand or rarity of traits in the collection. The floor remains in place until a lower one is set.

This is different from the general token or stock market, where demand and supply automatically change prices every second, instead of a single holder deciding the minimum price for an asset.

Pudgy Penguins came into existence in 2021. Each penguin is hand-drawn and features distinctive traits such as backgrounds, body, face, head and skin.

The collection has successfully expanded its presence beyond just digital collectibles into physical products and mainstream branding.

Parent company Igloo last year introduced Pudgy Toys, a toy line based on the digital art collection. It has since sold more than $10 million in collectible igloos and plushies through major retailers including Walmart, Target, Amazon and Walgreens.

Ethereum’s Ether Headed to $5K as Activity, Institutional Demand Grows

“According to ETH’s realized price—the average price at which holders purchased their ETH—the current upper limit for ETH’s price stands around $5.2k,” CryptoQuant said.

Investor demand, onchain metrics and network activity are setting up ether (ETH) to reach a $5,000 level for the first time, CryptoQuant analysts said in a report.

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Ether spot ETFs posted a 13-day inflow streak on Wednesday to reach nearly $2 billion in cumulative net inflows. The funds attracted their first billion from July to early December, but SoSoValue data shows that they needed only five trading days to capture the next billion.

Total daily transactions hovered around the 6.5 million to 7.5 million level in the past few months, compared to about 5 million through 2023, indicative of higher network activity.

Meanwhile, the total supply of ETH has reached its highest level since April 2023, but the amount of ETH burned via fees has been growing since September. The total supply of ETH has reached 120 million, marking the highest level since April 2023.

Burns refers to permanently removing tokens from circulating supply by sending them to a wallet that no one controls. As the network sees higher activity and demand, the burn rate increases, limiting the growth of ETH supply and creating deflationary pressure.

Higher network activity on Ethereum signifies increased usage and demand for the network’s capabilities, reflecting the growing adoption of decentralized applications. Moreover, it leads to greater ETH burned via transaction fees, which can create deflationary pressure on the total ETH supply, as the burn rate can outpace issuance during periods of high activity.

These factors cumulatively set up ETH to retake its all-time highs from 2021 and beyond.

“ETH could be heading above $5k if current demand and supply dynamics continue,” CryptoQuant said. “According to ETH’s realized price—the average price at which holders purchased their ETH—the current upper limit for ETH’s price stands around $5.2k.”

“This upper limit marked the top for ETH in the 2021 bull run. However, as new market participants buy ETH at higher prices, this upper price band continues to rise,” they added.

The recent surge in Ethereum’s price has significantly increased the total value of assets locked within its ecosystem, reaching $77 billion on Thursday, the highest level since January 2022.

The lion’s share of these assets is managed by just three key applications: Lido, which dominates with over $38 billion in staked ether, making it the largest liquid staking protocol; Aave, with $19 billion spread across various assets, functioning as a lending platform; and EigenLayer, a restaking platform, holding $18 billion.

The Ethereum network has witnessed a notable uptick in several key metrics in November. There’s been an increase in revenue, transaction fees, new wallet creations, and on-chain volume, all indicating heightened activity when compared to the quieter months from May to September, as a CoinDesk analysis previously noted.

Ether largely underperformed bitcoin and other major tokens since 2022 but saw a return in bullish sentiment after Donald Trump won the U.S. presidential elections in November, rekindling hopes for a DeFi bull run among investors.

Trump’s campaign has signaled a potential softening of regulatory pressures on cryptocurrencies, which could ease operations for DeFi platforms within the country. This anticipation has been a catalyst for increased demand for ETH and has propelled the growth of major DeFi tokens since early November.

Dogecoin Bets Spike to $1.3B as Trump Popularity Sees DOGE Rocket 15%

Stablecoin margined futures on DOGE have spiked, with DOGE denominated bets rising 33% since Sunday.

Futures interest in dogecoin (DOGE) is swiftly rising and nearing record levels from April, thanks to renewed trading interest in the token on the possibility of its abbreviation becoming a part of Republican Donald Trump’s administration.

DOGE prices are up 15% in the past 24 hours, CoinGecko shows, after an Elon Musk appearance at a Trump rally and a later X post of himself with the DOGE avatar. Traders are terming the price spike as a play on “Trump’s popularity,” as reported.

DOGE-denominated futures have risen 33% since Sunday to 8 billion tokens as of European morning hours Tuesday. That’s just 12% away from a lifetime record of 9 billion DOGE in open interest.

In stablecoin terms, the DOGE bets have spiked from $850 million to $1.3 billion, CoinGlass data shows.

OI refers to the total number of outstanding derivative contracts, such as futures or options, that have not been settled. High open interest indicates that there is significant interest in a particular asset. When open interest increases along with rising prices, it suggests new money is coming into the market, indicating a strengthening trend – such as Tuesday’s.

Higher open interest in token can lead to increased volatility, especially as contracts near expiration. Traders might rush to close, roll over, or adjust positions, which can lead to significant price movements.

Musk has gotten closer to Trump in the past few months with increased donations and endorsements. On various talk shows, he has talked about creating a “Department of Government Efficiency,” abbreviated as D.O.G.E, in a quest to make government spending more efficient.

Trump has said he would enlist Musk to run a “government efficiency commission” if he wins a second term as U.S. president, per BBC.

Some traders have jumped on that narrative as a bullish catalyst in the near term.

“Elon is memeing the idea of a ‘Department of Government Efficiency’ into reality and is able to tie it to DOGE somehow,” influential X account @theunipcs told CoinDesk in a message. “If we get a Trump win after the U.S. elections next week, i expect an even more parabolic move in dogecoin and the ‘Department of Government Efficiency’ ETH memecoin because it becomes a certainty that the department will be set up.”

“There will likely a multi-month delay between Trump winning and his inauguration as well as such a department being actually set up, and that provides a solid trade opportunity,” @theunipcs added. The trader was among the first individuals to publicly state the D.O.G.E trade thesis.

DOGE prices are up more than 30% since CoinDesk first reported on the D.O.G.E trade gaining interest among traders.

Celestia’s TIA Braces for Price Volatility Amid $900M Token Unlock

Token unlocking events usually weigh on prices, but multi-month reaccumulation, crowded shorts and bullish crypto prices could lead to a surprise rally, analyst said.

The native cryptocurrency of data availability blockchain Celestia (TIA) braces for volatility due to its massive supply event on October 30, which will nearly double the number of tokens in circulation.

Some 175 million of previously locked-up TIA, 80% of the current supply, will be released on Wednesday, in the largest single unlocking event since the token was launched last October, Tokenomist data shows. That’s $920 million worth of tokens with prices slightly above $5 on exchanges.

Core contributors are scheduled to receive 58 million ($298 million) TIA tokens, per Tokenomist. 65 million ($332 million) tokens are allocated to early investors of the project’s series A and B funding rounds, with another 52 million ($268 million) tokens for seed investors.

Cryptocurrency projects often lock a part of the token’s supply and release it gradually to prevent early investors and insiders from selling in large quantities immediately after they get the allocations. When the tokens are unlocked, they become available to sell, and thus, such events are usually considered bearish; often they induce price drops. However, sometimes investors front-run and may sell before the unlocking happens.

In TIA’s case, prices have tumbled as much as 80% from the February peak of $21, and have consolidated in the $4-$6 range for multiple months. Meanwhile, funding rates for TIA perpetual futures sit in deeply negative territory, reaching a -90% annualized rate on crypto exchange Binance, CoinGlass data shows. This suggests traders are expecting declining prices or TIA holders are hedging their exposure leading into the unlock.

“There could be some pronounced effects,” David Shuttleworth, partner at Anagram, told CoinDesk, noting that the amount of tokens being unlocked is multiple times larger than the average daily trading volume between $50 million and $200 million over the past month. “The broader timing, however, is favorable,” he added, with bitcoin (BTC) trading near all-time highs and other majors including ether (ETH) and solana (SOL) also performing well.

Given the broad crypto market rally, the probability of TIA surprising traders with a rally following the unlock has increased, according to well-followed crypto analyst Will Clemente, founder of Reflexivity Research.

“This BTC price action has further slid the probability of Thursday’s TIA unlock being bearish towards ‘no,'” Clemente said in an X post.

“6 months of reaccumulation after 80% drawdown, ton of OTC volume, most widely telegraphed unlock in crypto history, 9 figs [figures] short, BTC nearing ATHs,” he added. Am long rn.”

Bitcoin Holder Metaplanet Sells BTC Options to Boost Its $32M BTC Stash

The company strengthens its bitcoin position with a strategic options sale, generating nearly 24 BTC ($1.44M) in premium.

Tokyo-listed bitcoin holder Metaplanet Inc. is now using bitcoin (BTC) options to boost its coin stash, diverging from its peer, the U.S.-listed Microstrategy’s debt-fueled accumulation strategy.

On Tuesday, Metaplanet announced the sale of 223 contracts of bitcoin put options at the $62,000 strike with a maturity date of Dec. 27. The transaction involved Singapore-based QCP Capital as the counterparty and generated a premium of 23.972 BTC ($1.44 million). CoinDesk reached out to QCP Capital for a comment.

Metaplanet posted $13.826 million as margin collateral, with each contract offering a 0.1075 BTC premium, which Metaplanet received upfront. The transaction resulted in a nominal yield of 10.75% and an annualized yield of 45.63%.

The $13.826 million of margin collateral came from the proceeds raised during Metaplanet’s eleventh stock acquisition rights exercise. The purpose of this collateral is to ensure Metaplanet can meet the transaction if the option is exercised.

Strategic selling of puts

Metaplanet will use the premium received by selling put options to purchase more bitcoin. The company’s total bitcoin holdings now stand at 530.717 BTC ($32 million).

A put option gives the buyer the right, but not the obligation, to sell the underlying asset at a preset price on or before a specific date. Metaplanet is a put seller, meaning it is obligated to buy BTC at the strike price of $62,000, even if prices are lower on the day of the expiry.

If bitcoin’s price drops below $62,000 by the maturity date, the buyer will likely exercise this option, forcing Metaplanet to buy 223 bitcoin at the higher strike price. Therefore Metaplanet’s bitcoin holdings would increase by 223 bitcoin, even if the market price by Dec. 27 is lower, however the premium partially offsets the spot price risk.

If bitcoin’s price is higher than $62,000 by Dec.27, the buyer is unlikely to exercise the option since they can sell bitcoin on the open market at a higher price. The option would therefore expire worthless, while Metaplanet keeps the 23.972 BTC premium as profit.

Crypto at a Pivotal Moment

The U.S. election combined with an easier monetary environment could spark the next crypto bull market, says David Lawant.

Seismic events often trigger crypto-asset market cycle transitions. The 2016-2017 cycle was largely industry-driven, expanding crypto’s reach beyond early adopters. In contrast, the 2020-2021 surge was propelled by unprecedented COVID-era interest rate cuts.

Now, two powerful catalysts converge: the looming 2024 U.S. elections and a nascent global liquidity cycle for risk assets. This potent combination could shatter bitcoin’s $58,000 to $70,000 trading range, where it has largely remained since late March, potentially igniting the next major market movement.

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2024 U.S. elections likely to gain importance as election day nears

This election cycle marks several firsts for crypto, primarily how the industry emerged as a relevant topic in political discourse and campaign financing. Another interesting trend is how Polymarket, a breakthrough crypto application, now provides real-time estimates of consensus on election results, with over $1 billion at stake.

The chart below shows the relationship between two factors over 3-day periods: changes in Republican win odds on Polymarket and changes in bitcoin prices as a proxy for overall crypto market performance. Different election phases are color-coded: gray for the initial phase (before June 26), red for the period of Republican momentum (between the end of June and the end of July), blue for Democratic gains (between the end of July and mid-August), and black for the final stretch (since mid-August).

If the market linked crypto prices directly to Republican win odds, the dots in the chart above would form an upward-sloping 45-degree line. Conversely, a direct link to Democratic win odds would show a similar, but downward-sloping, line. Instead, we see a scattered cloud of dots, indicating no clear, consistent trend between election outcomes and crypto prices so far.

This dynamic is evident across all phases highlighted in different colors throughout the scatterplot. Although the relationship is stronger during the phase of Republican momentum, it still explains less than 20% of bitcoin price movements.

This doesn’t mean the elections are unimportant for crypto price action. It is possible, if not likely, that this relationship strengthens as we approach Election Day, now less than one month away. But this inconsistent relationship suggests that other critical factors have also been dominating crypto market price action.

Interest rate outlook hints at novel regime for crypto prices

Recent global liquidity shifts have driven markets worldwide, including crypto. The Federal Reserve’s strong start to this rate-cut cycle, coupled with China’s surprising market-lifting measures, likely fueled crypto’s recent price surge.

Unlike equities, crypto lacks extensive historical data for gauging returns across different interest rate regimes.

Nevertheless, examining crypto prices against rate environments remains instructive. The chart below shows the effective federal funds rate alongside Treasury constant-maturity yields from 1-year to 30-year tenors. For context, the lower chart displays bitcoin’s USD price (in log scale for perspective), with color-coded market cycles: green for the 2016-2017 and 2020-2021 bull markets, red for the 2018 and 2022 bear markets.

This chart suggests that a soft landing with lower rates — the current investor consensus — would create an unprecedented macro backdrop for crypto. This scenario differs from both the industry-driven 2016-2017 cycle and the COVID era, rate-cut-fueled, 2020-2021 surge.

Consequently, macroeconomic factors are expected to significantly influence crypto prices in the near term, as evidenced by strengthening correlations between crypto and broader risk assets.

Looking ahead

Low crypto liquidity following Labor Day indicates a market in wait-and-see mode. While factors such as geopolitical tensions and supply/demand imbalances can still influence the market, two primary drivers most likely to define market direction into 2025 are still the upcoming election and global liquidity conditions. The next one to three months will be crucial in revealing how these trends will unfold.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.