MicroStrategy has announced an ambitious “21/21 plan” to increase its Bitcoin holdings by raising $42 billion over the next three years. The company, led by CEO Phong Le, will seek $21 billion through equity and an additional $21 billion via fixed-income securities. If Bitcoin prices remain stable, the firm would acquire approximately 578,586 BTC, accounting for around 2.7% of Bitcoin’s total supply.

MicroStrategy announces $42 billion capital plan including $21 billion ATM equity offering and a target of raising $21 billion in fixed-income securities. Join us at 5pm ET as we discuss our quarterly results and #Bitcoin Treasury Company plans. $MSTR https://t.co/eXYELbN1Dm

— Michael Saylor⚡️ (@saylor) October 30, 2024

Boosting Returns on Bitcoin Holdings

The primary objective of this substantial investment is to enhance returns from the company’s Bitcoin holdings. MicroStrategy has consistently held Bitcoin as a treasury reserve asset, and Le emphasised the company’s commitment to raising yield. “As a Bitcoin Treasury Company, we aim to leverage additional capital to increase BTC yields while maintaining a robust reserve,” Le stated. MicroStrategy’s year-to-date Bitcoin yield currently stands at 17.8%, with a projected annual return of 6% to 10% between 2025 and 2027.

Recent Financial Moves Fuel the Plan

In September, MicroStrategy successfully completed a $1.01 billion private offering of 0.625% convertible senior notes due in 2028. This offering targeted institutional investors, with part of the proceeds allocated to Bitcoin purchases. The convertible notes enable investors to exchange for cash or MicroStrategy shares, adding a layer of flexibility to the firm’s capital-raising strategy.

Record Stock Performance Amid Aggressive Bitcoin Strategy

“But, what if, another operating company comes along and buys more bitcoin than MSTR?”

It’s over. This is escape velocity. The only question is how wide will the gap be between $MSTR, every other PubCo on Earth combined, and even countries. https://t.co/ltJdiIPdTr

— Ryan (@ryQuant) October 30, 2024

MicroStrategy’s stock has surged over 1,500% since 1999, outpacing major tech companies, including Microsoft, which posted a 1,460% gain during the same period. Quant researcher Ryan McGinnis described the 21/21 plan as reaching “escape velocity,” underscoring MicroStrategy’s unique position among publicly traded companies actively pursuing Bitcoin acquisition.

With its aggressive strategy, MicroStrategy continues to set itself apart, leading the charge in corporate Bitcoin investment while betting on substantial future gains.

Bitcoin’s recent price slide has triggered over $250 million in liquidations, with market sentiment indicators showing “extreme greed”—a sign that often precedes corrections. The cryptocurrency market, experiencing high volatility, faced a 5.5% drop in overall capitalization, impacting Bitcoin and other major tokens.

$250 Million in Bullish Liquidations

Bitcoin (BTC) saw a nearly 4% price drop over 24 hours, falling from $72,500 on Thursday to just over $69,000 by Friday morning. This downturn led to significant bullish liquidations as investors took profits ahead of the weekend. According to data from CoinGlass, Bitcoin futures alone accounted for $88 million in losses, while ether (ETH) futures faced $44 million in liquidations. Traders who had bet on rising prices ahead of November’s U.S. elections suffered, as nearly 90% of all futures bets were bullish.

Fear and Greed Index Hits “Extreme Greed”

The popular Fear and Greed Index, which gauges market sentiment, hit “extreme greed” levels on Thursday. Historically, such peaks have indicated local market tops, often followed by corrective movements. By Friday, the index had receded slightly to “greed,” suggesting a potential for further corrections. The index highlights a trend where extreme fear signals buying opportunities, while extreme greed often points to upcoming sell-offs.

Bitcoin’s open interest—representing the value of open contracts—reached a record high of over $43 billion earlier this week but dropped to just above $41 billion by Friday. This shift often signals a turning point, as large-scale liquidations can prompt a price reversal. The liquidations underscore a highly speculative environment, with traders potentially overleveraging amid bullish sentiment.

Wider Market Retreat as Correction Looms

Bitcoin’s downturn caused ripples across the broader crypto market, with other major tokens like Solana (SOL) and Dogecoin (DOGE) following suit, each seeing nearly $15 million in liquidations. The weekend profit-taking follows weeks of price gains fueled by positive economic and political sentiment, with some traders anticipating Bitcoin’s rise to $80,000. However, the recent wave of liquidations and sentiment indicators suggest a market at risk of correction, potentially dampening short-term gains for traders.

Bitcoin soared past $71,000 on Tuesday, marking a significant 5% gain within 24 hours and crossing a critical resistance level. This rally, spurred by increased buying activity among major traders or “whales,” comes just a week before the U.S. elections—a potential catalyst that many in the crypto community believe could benefit Bitcoin regardless of the political outcome.

Short Liquidations Skyrocket

Bitcoin Price Chart | Source: CoinMarketCap

As Bitcoin breached the $70,000 mark, many traders betting on a price drop faced substantial losses. A staggering $176 million in short positions were liquidated, with Bitcoin and Ethereum short traders suffering losses of $88.89 million and $39.73 million, respectively. This wave of liquidations highlights the volatile market environment as traders pivot amid heightened demand.

Strong Buying Demand from ETFs and Whales

Large-scale buying interest continues to come from Bitcoin exchange-traded funds (ETFs), which have seen inflows of around 47,000 BTC over the last two weeks. Much of this activity has been observed on Binance, particularly during Asian trading hours, suggesting a robust demand from high-volume players looking to capitalise on potential future gains.

Following Bitcoin’s lead, other cryptocurrencies experienced notable gains. Dogecoin jumped 15%, while Shiba Inu saw an 8% increase. Ethereum gained nearly 5%, with Cardano, Solana, and BNB Chain all climbing by over 3%. The broader market optimism underscores the anticipation around the U.S. election and the overall positive sentiment surrounding crypto assets.

Traders Eyeing $75,000 Target

With the November elections on the horizon, options traders are focusing on a potential $75,000 price target for Bitcoin. As traders weigh the election’s impact on traditional markets, many see a favourable environment for Bitcoin’s growth regardless of the outcome, cementing optimism that new highs may be in sight.