The financial stability of Strategy, the company led by Michael Saylor and the largest Bitcoin (BTC) accumulator, is a determining factor in the digital currency’s short-term price fluctuations, according to a report from American bank JP Morgan.
According to analysts at the bank led by Nikolaos Panigirtzoglou: The bearish pressure on the market comes from two sides.
These are the hashrate decline and Strategy’s corporate situation, affected by repeated mining bans in China.
First of all, experts recalled that: Bitcoin hash rate has decreased. This week it totaled 12%, increasing from 1,113 EH/s to 996 EH/s, as shown in the following graph.
The decline occurred after China prepared new mechanisms against digital mining and strengthened cooperation between countries to stop the increase in illegal trading of crypto assets.
Analysts at the bank said that while lower hashrates typically increase miners’ income, Bitcoin’s price continues to be below its cost of production.
Add to this situation high energy costs, Several miners were forced to liquidate some of their holdings. Factors that typically influence the price of a digital asset to increase selling pressure in the market.
Bitcoin market focuses on strategy
Nevertheless, JP Morgan is considering Bitcoin miners and their crisis. They do not determine the next market move.
Instead, they believe the focus will be on strategy. This is a reminder that the ratio comparing the company’s market capitalization to its total Bitcoin reserves (mNAV) fell to 0.84 in November. The above shows that the market values the company lower than the value of its BTC holdings.
It has now recovered and is now 1.01 at the time of writing this article. And according to bank analysts, that’s because the company There will be no immediate pressure to sell your Bitcoin. Additionally, you can meet your financial obligations without having to part with your digital assets.
The JP Morgan report states:
“If this ratio stays above 1.0 and MicroStrategy is able to finally prevent a Bitcoin sell-off, the market will likely calm down and the worst of the Bitcoin price is behind us.”
A financial company called JP Morgan.
Similarly, Strategy also recalled that it had created a dollar reserve of USD 1.44 billion, enough to cover approximately two years of debt payments and dividends. This will further reduce the risk of forced sales.
loss insight A number of JPMorgan analysts met as the company faces questions about Strategic’s business model and regulatory pressures. This week, CriptoNoticias reported that Michael Saylor was lobbying to keep his company from being removed from MSCI.
