Dips usually present themselves as good buying opportunities to long-term investors. From the micro perspective, the broader crypto market has been quite bearish lately. Bitcoin’s rough patch, at this point, seems to have extended itself. The aforementioned narrative gained even more steam yesterday as the coin dropped to a level below $40k for the first time since September last year.
Trick or Treat?
Encashing on the state of the market, quite a few renowned players filled their bags with additional coins lately.
Consider this – Bitcoin mining farm Bitfarms purchased 1000 coins roughly worth $43.2 million during the first week of January. With the aforementioned purchase, the publicly-traded company’s HODLings are up by 30% and currently stand around 4,300.
In the statement released on Monday, Bitfarms’ CEO Emiliano Grodzki said that the company intended to “accumulate the most Bitcoin for the lowest cost” and “in the fastest amount of time” to benefit shareholders. He added,
“With the dip in BTC… we seized the opportunity to move cash into BTC.”
In fact, Michael Saylor’s business intelligence software Company MicroStrategy also bought over 1914 bitcoins between 9 December and 29 December for $94.2 million in cash.
While some resorted to buying, others like HIVE chose to stay back in the BTC market, despite the prevailing bearish sentiment.
State of shareholders
Crypto stock shareholders have evidently not been having a good time since November. The stocks of most companies have had a 50% haircut in the said timeframe.
MicroStrategy, for instance, was down by 49% when compared to its November $891 peak. Trading at $16 at the time of press, even Mike Novogratz’s Galaxy Digital was down by more than 50% relative to its November highs. In fact, Square and Silvergate too posed similar numbers for the said timeframe at the time of press.
Bitfarms, for that matter, couldn’t shield itself from the broader crypto-stock downtrend either. Despite the aforementioned purchase, its stock price didn’t have much to offer to ST investors.
The long-term cheer
Despite the not-so-glamorous performance highlighted above, it shouldn’t be forgotten that companies who have held Bitcoin on their balance have historically fared better than others and Bitcoin itself.
Companies who have bought BTC during this dip have quite literally purchased it at discount. Even those who continue to HODL it on their balance sheet definitely have an added advantage in the long-term when compared to their counterparts who don’t.
Thus, when BTC’s price steps out of its bearish setup and re-commences its uptrend, then these companies would be able to wipe off their losses faster than the rest.