The price of Bitcoin surged on Thursday, a change closely related to a plan announced by MicroStrategy.
The Zhichun Financial APP reported that the price of Bitcoin rose on Thursday, closely related to a plan announced by MicroStrategy (MSTR.US). The company plans to issue more stocks to raise funds to purchase more Bitcoin. This news boosted market sentiment, driving up the price of Bitcoin. As of publication, the price of Bitcoin fell by 0.17% to $98,088, having earlier touched an intraday high of $99,876.70. The broader cryptocurrency Index, including Ether, Solana, and Dogecoin, also recovered from Wednesday's decline, rising by 0.2%.
Sean McNulty, the trading director at liquidity provider Arbelos Markets, noted that the announcement by MicroStrategy to issue more stocks next year to purchase more Bitcoin is the main reason behind the rise in Bitcoin prices. According to a document submitted to the USA Securities and Exchange Commission on December 23, MicroStrategy Inc. is seeking to increase the authorized share count of Class A common stock and preferred stock, which will provide the company with more funds to accumulate Bitcoin.
Earlier this week, MicroStrategy announced that it had purchased an additional $0.561 billion worth of Bitcoin at an average price close to its historical high, marking the company's seventh consecutive week of purchases. So far this year, Bitcoin has risen by 135%, outperforming returns from traditional investments such as Global Equity and Gold.
However, some traders warned that due to the large number of expiring open contracts on Bitcoin and Ether derivatives, there could be market volatility in the coming day. On Friday, the open contracts on the Deribit derivatives Exchange will reach a record $43 billion, including $13.95 billion in Bitcoin Options and $3.77 billion in Ether Options.
McNulty from Arbelos Markets stated that market makers might unwind hedges and short Bitcoin, which could lead to market volatility on Friday.