Since August 2020, MicroStrategy has announced 28 purchases of Bitcoin (BTC), totaling 158,245 BTC, with an average holding cost of $29,582.

However, every time MicroStrategy announces a purchase of Bitcoin, the following voices often appear on social media:

① MicroStrategy's purchase price is always higher than the market price at the time of announcement, which seems to be a rescue;

② Whenever MicroStrategy announces its purchase of BTC, the market always seems to start falling.

This article will conduct an in-depth analysis of MicroStrategy’s 28 BTC purchases to explore whether there is a certain connection between MicroStrategy’s announcement of BTC purchases and market prices.

MicroStrategy Officially Announces Price Difference Analysis

The prices of MicroStrategy's 28 BTC purchases are as follows. It can be clearly seen that there is a significant price gap between the "market price at the time of announcement" and the "purchase price".

In fact, the "market price at the time of announcement" was higher than the "purchase price" 60.7% of the time, meaning that MicroStrategy seems to tend to see an average market drop of 1.43% after a purchase is announced.

The specific price difference (absolute value) is as follows:

• 50% of the spread is within $1,000;

• 39% of the spread is between $1,000 and $5,000;

• Three other times the spread exceeded $5,000: -$5,716, -$5,991 and -$9,931.

If measured in terms of spread rates, the conclusion will be even more significant:

• 25% of the spreads are between 0% and 2%;

• 39% of the spreads are between 2% and 5%;

• 21% of the spreads are between 5% and 15%;

• There were four other times when the price difference rate exceeded 15%, namely -15.53%, -15.93%, 16.73% and -17.28%.

MicroStrategy officially announced market situation analysis

After MicroStrategy announced its purchase of Bitcoin, we conducted an analysis of various time periods and markets, excluding the purchase data on September 25. The following are the specific dimensions of the analysis:

Time: We selected different time periods such as 1 day, 3 days, 1 week, 2 weeks, and 1 month for comparison;

Markets: We cover Bitcoin (BTC), Ethereum (ETH), and averages of major altcoins (including BNB, XRP, ADA, DOGE, SOL, TRX, DOT, MATIC, LTC, BCH, LINK, and the top 20 non-stable coins).

The results show that the statement that "MicroStrategy announced the purchase of BTC, the market will start to fall" does not seem to be groundless. In the short term, this situation is reflected in all three types of markets, but as time expands to a week later, the probability of rising begins to rise, especially in the Ethereum market, where this pattern is most obvious.

On the other hand, MicroStrategy's purchase quantity or amount each time is not the same, so we performed a weighted calculation, using the amount as the weight. The results show that the decline in the first three days still exists, but the magnitude has decreased. In the subsequent time period, the profit and loss ratio began to rise sharply, indicating that MicroStrategy is more likely to enjoy the opportunity of long-term growth when increasing investment.

in conclusion

In general, there are two patterns in the market related to MicroStrategy that seem to be consistent with the statistical results. As the first Nasdaq-listed company to purchase Bitcoin, MicroStrategy established most of its positions at the end of 2020. Although the market may reverse in the short term, it sticks to its positions and only sells Bitcoin once, showing its confidence in the bull market. This analysis emphasizes the trends and opportunities in the market, and investors should make decisions based on their risk preferences.