They say dips are there to buy – and that’s apparently the approach taken by a NASDAQ-listed software company. Its CEO Michael Saylor tweeted that his company, MicroStrategy, had just spent $ 10 million to buy 314 additional Bitcoin ( read the Buy Bitcoin cheaply guide ).
Form 8-K filing with the Securities and Exchange Commission (SEC) confirms this latest purchase. It also includes a summary of the company’s overall Bitcoin position.
Based on this information, MicroStrategy currently has earnings of $ 1.2 billion, which translates into a return of approximately + 104%.
„As of January 22, 2021, the company holds approximately 70,784 bitcoins that were purchased for a total purchase price of $ 1,135 billion and an average purchase price of approximately $ 16,035 per bitcoin, including fees and charges.“
MicroStrategy has become something of a beacon for institutional Bitcoin adoption. The company has been buying BTC as an inflation hedge since September last year.
Bitcoin FUD scares the market
In the past 24 hours or so the bears have been rampaging. Tremendous selling pressure caused the Bitcoin price to drop to as low as $ 28.6k. But a rebound at that level in the early hours rekindled hopes of recovery.
Observers have attributed the slump to several events this week . But perhaps most noticeable is the „Double-Spend Bitcoin“ FUD that has been making the rounds.
As the name suggests, double-spending refers to a potential issue where two recipients can spend the same BTC. This calls into question the validity and security of the blockchain.
It started mid-week when BitMEX Research tweeted the discovery of what appeared to be a small „double spend“.
“Today there was a stale bitcoin block for 666,833. SlushPool beat F2Pool in one race. It appears that a small double donation of around 0.00062063 BTC ($ 21) has been discovered. “
Following this, several outlets began to stir up the FUD flames. Terms like „critical bug“ or „terrible scenario“ did little to help the cause – which ultimately led to a Twitter meltdown.
There was no double issue
Since then, further research has shown that there was no double donation. BitMEX Research later tweeted that it was a replace-by-fee (RBF) transaction.
What Happened: Someone sent 0.00062063 BTC but set the lowest possible fee. Because the fee was so low, it took a long time for the transaction to be confirmed. Then, to speed up the process, the sender tried to advance the original transaction with an RBF.
At this point, however, the network had already confirmed the original transaction.
Bitfinex CTO Paolo Ardoino explained the problem as a brief disruption during the chain reorganization. But there was no security breach as the upstream RBF transaction with the going down chain became invalid.
“What actually happened is that two blocks were mined at the same time. As a result, the chain was reorganized, which did not result in a double spend. “
So when you take that into account, the supposed problem wasn’t at all.