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Bitcoin Treasury Increases by $60 Million in Least Expensive Purchase Made in a Month

Instead of common stocks, the company financed the purchase.

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Bitcoin's Treasury augmented by $60 million with the smallest purchase in a month
Bitcoin's Treasury augmented by $60 million with the smallest purchase in a month

Bitcoin Treasury Increases by $60 Million in Least Expensive Purchase Made in a Month

In a move that signals continued interest in Bitcoin, Strategy, a leading player in the digital asset space, has announced its latest Bitcoin purchase. The company, which currently holds around $73 billion worth of Bitcoin, purchased $60 million worth of the cryptocurrency. Interestingly, this latest purchase was funded entirely with proceeds from preferred shares, not common shares. This move aligns with Strategy's recently modified equity issuance policy, which states that it would only issue common shares when its stock traded at more than a 2.5x premium to its Bitcoin holdings. However, Strategy's stock hasn't traded at this premium since November. Geoff Kendrick, global head of digital assets research at Standard Chartered, believes that market saturation is the primary reason for the compression of the premium. Kendrick argues that there are currently too many imitators in the Bitcoin treasury space, which may lead to consolidation. His view suggests that a saturated market may not be entirely negative, as it could lead to consolidation opportunities. In light of this, Strategy could potentially be among the most active buyers in the event of consolidation in the Bitcoin market. The cryptocurrency market has been buffeted by macroeconomic uncertainties recently. Bitcoin, in particular, changed hands around $115,000 on Monday. Despite this volatility, 80% of respondents believe Bitcoin will trade above $105,000 throughout September. Last week, options for Strategy's preferred shares were listed on the Nasdaq. Despite the 2% dip in Strategy's stock price to $325 on Monday, the company still boasts a premium to its Bitcoin holdings, albeit a reduced one. According to Bitcoin Treasuries, on Monday, Strategy's stock was valued at a 1.26x premium to its Bitcoin holdings, down from a 1.39x premium a month ago. It's worth noting that Strategy has revealed four distinct types of equity options this year, some of which can be converted into common shares and others requiring regular dividend payments. However, no information is available about any party issuing preferred stock shares of Strategy last month with a nominal value at least 2.5 times the value of Strategy's Bitcoin holdings. In conclusion, Strategy's latest Bitcoin purchase and the potential for market consolidation are key developments in the digital asset space. As the market continues to evolve, it will be interesting to see how Strategy and other players navigate these changes.

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